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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