General Motors Stock Hits Three-Year Low Amid Air-Bag Safety Concerns
General Motors stock reaches a three-year low as reports of dangerous air-bag parts in GM vehicles cause concern. Regulators declare recall and discuss the issue.
Shares of General Motors (GM) have tumbled to a three-year low following a report by The Wall Street Journal revealing that potentially dangerous air-bag parts were used in at least 20 million GM vehicles. The stock fell 4.3% to reach a low of $29.72 after the exclusive report was published. As of now, GM shares are down 11% year-to-date.
According to unnamed sources cited in the report, GM has not previously disclosed the exact number of vehicles affected by the air-bag problem. This revelation makes GM one of the most exposed companies in compliance with U.S. auto-safety regulators' push to recall 52 million air-bag inflators designed by ARC Automotive, a Tennessee-based auto supplier.
The faulty air-bag inflators have been known to explode with excessive force during a vehicle crash, posing a grave threat to passengers. Metal shrapnel can be propelled through the vehicle's interior, causing severe injuries or even fatalities. To date, at least two fatalities and several injuries have been attributed to this issue.
The National Highway Traffic Safety Administration (NHTSA) has declared that the air-bag inflators are defective and necessitate a recall. In light of this determination, the NHTSA has scheduled a public meeting for Thursday to discuss the matter further.
GM shares have been facing downwards pressure in recent weeks due to a strike led by members of the United Auto Workers union across all three Detroit carmakers. The strike was prompted by a failure to reach a new labor deal.