GM Drops on Air-Bag Probe
General Motors (GM:US) is facing a new significant challenge as it has an estimated 20 million vehicles equipped with potentially dangerous airbag parts, according to a report in the Wall Street Journal.
GM stock fell 2.3% on Thursday following the WSJ report.
Congress member Ro Khanna has been selling GM shares in recent months, including two $15,000 - $50,000 sales made in July when the stock was trading around the $40 mark.
Following Thursday’s selloff, GM shares closed at $30.31. Shares are now down 8.2% year-to-date.
This situation places GM among the automakers most exposed in a push by U.S. auto-safety regulators to recall 52 million airbag inflators produced by ARC Automotive, a Tennessee-based auto supplier.
The reason for this recall effort is that these inflators have been known to explode with excessive force during vehicle crashes, a defect that can result in metal shrapnel being propelled and causing severe injuries or even fatalities.
While the National Highway Traffic Safety Administration (NHTSA) has not yet officially disclosed the total number of vehicles that would be subject to the recall, or the specific GM models affected, the number of GM cars and trucks equipped with these inflators could potentially be higher, according to the report.
NHTSA recently held a public meeting to discuss its determination that these airbag parts are indeed defective and should be subject to a recall.
If the recall goes ahead on the scale currently being considered, it would rank among the largest recalls in the history of the United States. This situation presents a substantial challenge for GM as the company is still locked in talks with the workers union about a new long-term deal.
