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Cars and Drivers

GM Recall Charges Now Up to $1.3 Billion

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By Paul Ausick Updated Published
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GM Ignition Switch
General Motors Co.
In yet another blow to the company’s image and profit, General Motors Co. (NYSE: GM) today added the ignition lock cylinder to its recall of 2.2 million older model U.S. cars. All the cars included in this recall have already been recalled due to the ignition switch defect that has been linked to 13 deaths and numerous injuries.

GM now says that it will take a first quarter charge of $1.3 billion related to the recalls the company has initiated this year. This replaces the $750 million estimate GM made less than two weeks ago. The charge includes replacing the ignition switch, cylinder, making new keys if necessary, and providing courtesy transportation.

According to GM, the ignition lock cylinders may allow the ignition key to be removed while the vehicle is running leading to a possible rollaway, crash, and occupant or pedestrian injuries. The company has received one report of a rollaway in a parking lot that resulted in a crash and one injury. The company knows of no fatalities linked to the cylinders.

Shares of GM have not yet been hit by the news and are trading up about 0.7% in the mid-afternoon on Friday at $33.82 in a 52-week range of $28.44 to $41.85.

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About the Author Paul Ausick →

Paul Ausick has been writing for a673b.bigscoots-temp.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.

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