General Motors Co. (GM) has increased the approved death claims associated with the late faulty ignition switch recall to 27 with apprehensions of a further rise. Kenneth Feinberg, who was hired by the company to assess death claims and deploy funds, has approved the payouts and stated that nearly 151 other fatality claims are presently under review.
Notably, Feinberg will deal with the claims registered against General Motors between Aug 1 and Dec 31 this year. Further, he is expected to draw up an updated report on the death claims every Monday. Feinberg is well-known for managing compensation funds for the victims of 9/11, the Boston Marathon bombing and the BP oil spill in the Gulf of Mexico.
Feinberg has received 1,371 claims in total, including 1,193 injury claims. He has found that only 25 out of these non-fatal injury claims are valid. He further stated that clear-cut claims will be processed within 90 days, while it will take 180 days for the ambiguous cases.
For quite some time, General Motors had been facing the brunt of the delayed defective ignition switch recall which involves about 2.6 million vehicles. The recalled vehicles mainly include Chevrolet Cobalts and Saturn Ions. The company issued a recall for these vehicles in February this year, although the problem was identified way back in 2001.
General Motors anticipates incurring a cost of $0.4 billion to $0.6 billion for the ignition switch compensation program. However, the expenses can scale even higher though Feinberg did not confirm the exact compensation amount.
General Motors currently carries a Zacks Rank #4 (Sell). Better-ranked automobile stocks worth considering include SORL Auto Parts, Inc. (SORL), Tesla Motors, Inc. (TSLA) and Gentherm Inc.(THRM). While SORL Auto Parts and Gentherm sport a Zacks Rank #1 (Strong Buy), Tesla carries a Zacks Rank #2 (Buy).
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