An investigation into GM's handling of complaints about faulty and dangerous ignition switches is clobbering the company's stock
General Motors shares took a big hit Tuesday as a federal probe was launched into the automaker’s handling of defects complaints tied to 12 deaths.
General Motors stock fell 5%, or $1.91 per share to close at $35.18 in trading Tuesday on reports of the news, and continued to fall Wednesday morning.
The kingpin automaker is under intense scrutiny for its response to complaints about faulty ignition switches, which led last month to a recall of 1.6 million cars. The U.S. Attorney for the Southern District of New York is leading the probe, reports the Wall Street Journal, but lawmakers in the Senate and House of Representatives are also investigating. Rep. Henry A. Waxman (D-CA) said Monday the House Energy and Commerce Committee will examine whether GM knowingly allowed faulty and dangerous cars to remain in use without recalling them.
The National Highway Traffic Safety Administration recorded a July 2005 death when safety bags did not deploy in a Chevrolet Cobalt, and pointed out the problem to GM in March 2007. The automaker did not recall the vehicles until this year.
The recall of 1.6 million autos covers the 2003-’07 Saturn Ion, the 2006-’07 Chevrolet HHR, the 2006-’07 Pontiac Solstice, the 2007 Saturn Sky, and the 2005-’07 Chevrolet Cobalt and Pontiac G5.