General Motors Company (NYSE:GM) is coming under a lot of pressure, after reports of up to 90 deaths being linked to a faulty ignition in the company’s cars. The ignition is said to inadvertently shut off the engine, disabling the steering capabilities and airbags of the vehicle. The reported number of injuries has reached 163 this week. General Motors is still to pay compensation to the families of those affected.
Previously, a federal bankruptcy judge blocked a number of lawsuits being filed against the company. The decision has had saved General Motors an estimated $7-$10 billion in economic losses. However, GM still has had to recall around 30 million cars, with 2.6 million of them having the faulty switch. The recall has already cost the company $2.8 billion, but GM has overhauled its safety practices in response.
GM had granted a deadline of January 31 to the victims, for filing their claims. The company has hired the services of an attorney, Kenneth Feinberg, to help investigate the 4300 claims received. GM’s trust seems to have been rightly placed since Mr. Feinberg reported that over half the claims were ineligible, with 23% cases still left to be sorted out. The company has so far made 118 offers to the victims, but the amounts have not been disclosed as yet. Out of these, 113 have been accepted, with the remaining 5 being rejected by the families.
Fox Business seems to have worsened things for GM since the group claimed that GM knew about the faulty ignition for about a decade, but did not start the recall until last year. With so much going on, the company management still feels that they would be able to report a good 1Q2015. Last year GM CEO, Mary Barra, and her team had set out a few ambitious goals for the company, which they claim they are on a path of achieving. The management also believes that the 1Q2015 report would reflect positively on their progress.
General Motors Company (NYSE:GM) closed at $35.78 after gaining 0.53% on April 27. The company has 1.61 billion shares being traded in the market, with a 52-week range of $28.82-$38.99.
