General Motors Company GM has increased the number of approved death claims associated with faulty ignition switches to 67, according to media reports. In addition, the automaker has approved 11 severe injuries and 102 other injuries.
General Motors has received 4,342 claims associated with the defective ignition switches. Til last Friday, 475 death claims, 289 disastrous injuries and 3,578 less-serious injuries that needed hospitalization were reported.
General Motors has hired Kenneth Feinberg to assess the death claims and deploy funds. 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.
According to Feinberg, 820 claims were ineligible and 1,492 are still under review. Also, 1,066 claims out of the total lacked sufficient paperwork or evidence, and 784 had no documentation at all.
For quite some time, General Motors has been facing the brunt of the delayed recall of about 2.6 million vehicles with defective ignition switch. The faulty ignition switches lead to shutting down of the engine and prevent deployment of the front air bags in the event of a crash.
The recalled vehicles mainly include Chevrolet Cobalts and Saturn Ions. The company issued a recall for these vehicles in Feb 2014, although the problem was identified way back in 2001. General Motors anticipates incurring costs of $0.4 billion for the ignition switch compensation program.
Lately, General Motors has been recalling vehicles in large numbers. The automaker announced 84 recalls covering more than 36 million vehicles in North America in 2014. Owing to the series of recalls made in the year, the company had also recorded a $2.9 billion charge for recall-related repairs.
General Motors currently carries a Zacks Rank #2 (Buy). Better-ranked auto stocks include Allison Transmission Holdings, Inc. ALSN, American Axle & Manufacturing Holdings Inc. AXL and Gentherm Inc. THRM. All these stocks sport a Zacks Rank #1 (Strong Buy).
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