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General Motors to Pay $1M as Ignition Switch Settlement
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General Motors Company (GM - Free Report) announced the settlement of investigation by the U.S. Securities and Exchange Commission on the 2014 ignition switch recall. As part of the settlement, the automaker will be paying a penalty of $1 billion. Though General Motors is ready to cough up the hefty fine, it has neither admitted nor denied any wrongdoing.
General Motors has been facing various issues for delaying the recall of 2.6 million vehicles with defective ignition switches, which can lead to an abrupt shut down of the engine and prevent the deployment of front air bags in the event of a crash. Even though the problem was identified back in 2001, the company issued a recall in Feb 2014.
Soon after the ignition switch recall, General Motors reorganized its vehicle engineering teams in order to provide greater transparency and accountability. The automaker also created a Speak Up For Safety program under which employees and suppliers can report any safety-related issues.
Since the announcement of the recall, General Motors has been actively resolving issues with customers as well as regulators. The faulty switches have led to around 124 cases of deaths and 275 injuries. The company has already paid $2 billion as settlements for the defective ignition switches to the U.S. Justice Department, shareholders and consumers. The company also spent around $575 million to settle shareholder litigations as well as death and injury claims.
General Motors outperformed the Zacks categorized Auto Manufacturers-Domestic industry over the last one year. Share price of the company increased 27.3% over a year while the industry saw a 25.9% increase. The company benefitted from the strong results last quarter and business initiatives including the expansion of Maven and investment in facilities. Expectations of higher earnings in 2016 and 2017 also buoy optimism.
Zacks Rank & Key Picks
General Motors currently carries a Zacks Rank #3 (Hold).
Fox Factory has an expected earnings growth rate of around 16.6% for the current year. Oshkosh Corporation has a long-term growth rate of 8.4% while the same for GKN is pegged at 6.3%.
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General Motors to Pay $1M as Ignition Switch Settlement
General Motors Company (GM - Free Report) announced the settlement of investigation by the U.S. Securities and Exchange Commission on the 2014 ignition switch recall. As part of the settlement, the automaker will be paying a penalty of $1 billion. Though General Motors is ready to cough up the hefty fine, it has neither admitted nor denied any wrongdoing.
General Motors has been facing various issues for delaying the recall of 2.6 million vehicles with defective ignition switches, which can lead to an abrupt shut down of the engine and prevent the deployment of front air bags in the event of a crash. Even though the problem was identified back in 2001, the company issued a recall in Feb 2014.
Soon after the ignition switch recall, General Motors reorganized its vehicle engineering teams in order to provide greater transparency and accountability. The automaker also created a Speak Up For Safety program under which employees and suppliers can report any safety-related issues.
Since the announcement of the recall, General Motors has been actively resolving issues with customers as well as regulators. The faulty switches have led to around 124 cases of deaths and 275 injuries. The company has already paid $2 billion as settlements for the defective ignition switches to the U.S. Justice Department, shareholders and consumers. The company also spent around $575 million to settle shareholder litigations as well as death and injury claims.
General Motors Co. Price
General Motors Co. Price | General Motors Co. Quote
Price Performance
General Motors outperformed the Zacks categorized Auto Manufacturers-Domestic industry over the last one year. Share price of the company increased 27.3% over a year while the industry saw a 25.9% increase. The company benefitted from the strong results last quarter and business initiatives including the expansion of Maven and investment in facilities. Expectations of higher earnings in 2016 and 2017 also buoy optimism.
Zacks Rank & Key Picks
General Motors currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the auto space include Oshkosh Corporation (OSK - Free Report) , Fox Factory Holding Corp (FOXF - Free Report) and GKN plc . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fox Factory has an expected earnings growth rate of around 16.6% for the current year. Oshkosh Corporation has a long-term growth rate of 8.4% while the same for GKN is pegged at 6.3%.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>