General Motors Company (NYSE:GM) announced yesterday that it would be recalling another 1.5 million cars globally and that the now 6.3 million cars and trucks in the recall will cost the company around $750 million.
General Motors: Another recall
2.6 million of the 6.3 million vehicles recalled have to do with the ignition defect that will be before Congress today and into tomorrow.
Prentice Capital Benefits From “15 Million New Robinhood Accounts”
Michael Zimmerman's Prentice Capital returned 3% in June, taking its year-to-date performance to 18.6% net of fees and expenses, according to the firm's June investor update, a copy of which ValueWalk has been able to review. Prentice Capital Benefits From "15 Million New Robinhood Accounts" Prentice employs a low net equity long/short strategy with a Read More
Given the decade-long delay in recalling these cars, expect no shortage of finger-pointing as Congress will hear from both General Motors’ Chief Executive Mary Barra and David Friedman, the acting head of the National Highway Traffic Safety Administration.
The problem goes back to the ability of drivers to accidentally move the ignition switch, while running, to the “Off” position. Once that occurred, power was severed to the airbags, power brakes, and power steering.
Because of the taxpayer bailout of General Motors, expect the congressional hearing to look at whether the government takeover of the company affected General Motors’ decision not to recall the cars in question.
Prepared testimony and spoiler alerts
“Had the information newly provided to NHTSA by General Motors Company (NYSE:GM) been available before now, it would have better informed the agency’s prior reviews of air-bag nondeployment in GM vehicles and likely would have changed NHTSA’s approach to this issue,” according to his prepared testimony.
That’s what he says. As to what she will say…..
“Sitting here today, I cannot tell you why it took years for a safety defect to be announced in that program, but I can tell you that we will find out,” Ms. Barra plans to testify.
When did congressional hearings last need spoiler alerts?
“We told the world we had a problem that needed to be fixed,” Ms. Barra is expected to say in her prepared testimony. “We did so because whatever mistakes were made in the past, we will not shirk from our responsibilities now and in the future.”
Barra recently created the position of vice president for safety, and 41-year General Motors Company (NYSE:GM) veteran Jeff Boyer was picked for the job. “With these safety recalls and lifetime warranties, we are going after every car that might have this problem, and we are going to make it right,” he said yesterday as General Motors announced its most recent recall.