Bad Timing for Barra, Worse for GM Investors (Bloomberg)
With General Motors (GM) CEO Mary Barra set to testify in front of the U.S. House today, this could be the beginning of a run away from shares of one of the Big 3 automobile builders. GM has already racked up charges of $750 million in recalling 7 million of its automobiles. And that could be just the beginning of its financial woes, as the company may be on the receiving end of an avalanche of legal action. Today, Ms. Barra will appear on the hill to try to explain why her company waited a decade before recalling vehicles known to be responsible for 13 deaths due to defects in ignition switches. Should the newly minted CEO be unable to convince lawmakers of the rationale for not recalling those cars, GM attorneys should brace for suit after suit. Investors may want to consider driving away from the company’s shares, at least for now, too.