General Motors Company
) is facing a slew of lawsuits over defective ignition switches.
A new lawsuit has emerged claiming that although faulty ignition
switches were used in Chevrolet Cobalts manufactured till 2010,
the company has recalled Cobalts of model years 2005-2007 only.
Another lawsuit claims that the position of the ignition switch
makes the car key vulnerable to being bumped, leading to a shift
from the run position to the off position. Thus, replacing the
key would not be enough to fix the problem. A wrongful death
lawsuit has also been filed against the company.
Meanwhile, a suit filed in Alabama claims that Cobalts built
before Apr 2009 and many other General Motors cars have another
problem for which the company had earlier issued technical
service bulletins. These bulletins warned dealers that the
ignition key could stick in the ignition cylinder of the cars.
However, General Motors did not fix the problem.
Other consumers have filed suits claiming compensation for the
financial losses they have suffered in terms of resale value and
for the inability to use their cars. Investors have also sued the
company seeking compensation for the loss in share value.
Meanwhile, a U.S. Senator has requested the Department of Justice
to coerce General Motors into setting up a compensation fund for
consumers who have suffered as a result of the defect either due
to injury, death or damage.
Two consumers in Texas have also requested a federal judge to
force the automaker to ask car owners to stop driving the
recalled cars immediately. They fear that using the cars without
fixing the problem will lead to more crashes and casualties. The
company contends that it had asked car owners to drive the cars
after removing everything from the key ring apart from the
Meanwhile, General Motors has agreed to return the black box of a
car that had crashed in 2010 due to a defective ignition switch.
Congressional hearings related to the case will begin from April.
General Motors currently holds a Zacks Rank #4 (Sell). Some
better-ranked automobile stocks worth considering are
Tata Motors Limited
Tesla Motors, Inc.
). Tata Motors and Dailmer sport a Zacks Rank #1 (Strong Buy)
while Telsa carries a Zacks Rank #2 (Buy).
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