GM Shareholders Unflappable As Recall Repairs Begin This Week

Cameron Aubernon
by Cameron Aubernon

In spite of General Motors losing $3 billion in shareholder value over four weeks since the recall crisis began, Bloomberg reports investors are holding onto their shares in the belief the automaker will recover from the debacle. Though questions about the delay persist, most shareholders are pleased with how CEO Mary Barra is guiding her company through the maelstrom.

Other factors in the massive stock decline include overseas challenges and weaknesses in product lines, including bringing European profits into the black, while Chevrolet’s Silverado fights Ram’s offerings in order to regain its traditional place in the monthly sales charts.

For those affected by the recall, CNN Money reports repairs of the out-of-spec ignition switch found in a handful of 2003 – 2011 vehicles will begin Monday, though the repairs will focus on the original recall of 2003 through 2007 models first, with fixes due later for 2008 – 2011 vehicles. GM advises consumers to make an appointment with their dealers before bringing in their affected vehicles. The repair is free of charge, and will take 30 minutes to accomplish, though customers may have to wait longer due to “scheduling requirements,” according to the automaker.

Speaking of the dealers, Bloomberg reports GM dealers as a whole have had to “act as therapists” for their customers who, like owner John McEleney of Clinton, Iowa, have been bombarded by recall news on a daily basis:

It’s a little bit unnerving because GM is on the front page — not of the business section, but the front page of the paper and the lead story on the news every day. People are concerned because they’re GM owners and they see all this publicity regarding GM.

Regarding the emergency injunction that would have forced GM to request affected consumers to park their cars until they were repaired, Detroit Free Press says U.S. District Judge Nelva Gonzales Ramos in Corpus Christi, Texas needs more time to thoroughly examine the brief filed on behalf of 15 families.

As for the National Highway Traffic Safety Administration, New York Times reports the agency and Congress both face questions over the former’s handling of the GM recall, from funding and punishments available to the NHTSA, to how the agency couldn’t find a clear link between the out-of-spec ignition and undeployed air bags in 2003 through 2006 Chevrolet Cobalts and Saturn Ions. Consumer advocate and former NHTSA chief Joan Claybrook offers this summation:

General Motors made the part, they designed the part, they sold the part that was defective and they knew about the problem fairly early on. And I believe that General Motors has the greatest culpability. But there is a really important story about NHTSA’s failure to handle this properly.

Cameron Aubernon
Cameron Aubernon

Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.

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  • Tonycd Tonycd on Apr 07, 2014

    One thing never seems to change: GM remains a flawed company but a compelling story line. This line of stories should be bannered as the Robert Farago Heritage Series.

  • John Rosevear John Rosevear on Apr 08, 2014

    "Massive stock decline"? It went from around $40 to around $34, and a lot of that decline had to do with the lousy US sales numbers we saw across the board in early 2014 (F was down too). Any serious GM investor (disclosure: I own GM stock) is watching events closely, but I don't think the recall will cause a huge selling wave unless something really bad breaks or Barra starts to look genuinely overwhelmed. GM's survival is not presently a concern, Europe continues to improve, the products continue to improve, there's plenty of money in the bank, progress continues to be made on a whole lot of other fronts. They are slowly but more-or-less surely taking the right steps to put GM's profits in the same league as those at VW and Toyota, which should roughly double the stock price if they succeed. As long as that basic story continues to unfold, the stock still looks good over a 5-7 year horizon.

    • See 2 previous
    • Thelaine Thelaine on Apr 08, 2014

      @John Rosevear They have disgusted me for 30 years and the terms of the bailout p*ssed me off to to no end, but that doesn't mean I'm rooting against them. I hope you are right.

  • VoGhost Key phrase: "The EV market has grown." Yup, EV sales are up yet again, contrary to what nearly every article on the topic has been claiming. It's almost as if the press gets 30% of ad revenues from oil companies and legacy ICE OEMs.
  • Leonard Ostrander Daniel J, you are making the assertion. It's up to you to produce the evidence.
  • VoGhost I remember all those years when the brilliant TTAC commenters told me over and over how easy it was for legacy automakers to switch to making EVs, and that Tesla was due to be crushed by them in just a few months.
  • D "smaller vehicles" - sorry, that's way too much common sense! Americans won't go along because clever marketing convinced us our egos need big@ss trucks, which give auto manufacturers the profit margin they want, and everybody feels vulnerable now unless they too have a huge vehicle. Lower speed limits could help, but no politician wants to push that losing policy. We'll just go on building more lanes and driving faster and faster behind our vehicle's tinted privacy glass. Visions of Slim Pickens riding a big black jacked up truck out of a B-52.
  • NotMyCircusNotMyMonkeys dudes off the rails on drugs and full of hate and retribution. so is musky.
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