If you submitted a claim to the General Motors ignition switch compensation fund, chances are that you, along with the overwhelming majority of other claimants, were deemed ineligible for compensation.
The fund, led by lawyer Kenneth Feinberg, who also administered the Deepwater Horizon Oil Spill Trust and the September 11th Victim Compensation Fund, recently finished determining which claims are eligible. When everything was said and done, the fund approved just 399 of the 4,343 claims filed in total, rejecting 3,944 claims, meaning that 91 percent of the total claims were rejected.
Camille Biros, Deputy Administrator of the fund, said that the claims were rejected because they “couldn’t support any connection to the ignition switch.”
In some cases, the airbag inflated during the crash, meaning that the ignition switch was not at fault, according to the administrator. In other instances, claimants filed paperwork for vehicles that weren’t part of the ignition switch recall, like older model year vehicles.
And though the ignition switch fund has completed the review, the company still faces 181 lawsuits for wrongful death or injuries in the U.S. and Canada from those who chose not to enter their cases into the ignition switch fund. As such, the fire might soon be over, but GM still faces plenty of heat for the ignition switch debacle.
Comments
Reject 91% of the claims, and the stock is still down 18% since the 2010 IPO.
Look for an uptick in, say, 2025?
I recall a post not long ago on this site, basically saying the ripple effect of China would have minimal effect on GM.
But then you read things like this:
“GM is heavily exposed to the rising risk to volume, competition and currency in China,” Morgan Stanley analyst Adam Jonas said in a research note. “While the market may have got the message short-term, we believe the long-term risks to GM investors may be underestimated, overshadowing very strong performance in North America.”
Throw in whatever penalties the govt is going to exact for the Cobalt/Ion debacle, and things don’t look all that rosy.
But management just got their options at a wholesale price, so they should be ok.
An uptick in 2025? Look at the big picture. GM is doing very well right now, better than a lot of companies. Best, financially? No way, but far better than a lot of the auto companies.
They have made a very large turnaround given where they were 5 years ago and where they are now. Their portfolio of vehicles is top notch, if not segment leading in just about every category they’ve put “all new” cars in, during the last 2 years.
The fact is many money funds and brokers are recommending GM stock right now. The price is cheap and with the great amount of investment in R&D and the number of new product planned they are situated to increase the value in in as Mike says the big picture.
The ignition deal is pretty much over and GM survived it well.
Several hedge funds I think 6 have invested heavily in GM recently.
Mike you have the right idea on this. Investments are not lottery tickets and are big picture ventures.
OK – guess it depends what your timeline is.
But the IPO was $33, five years later, GM’s @ $27.
Then you have Russia evaporating as a market, China (more importantly) taking a dive on a number of fronts, and the unknown billions the govt is going to fine GM for ignition-gate.
As for hedge-fund guys, lest we forget, it was only a few months ago that Mr David Tepper failed in his bid for a seat on the B of D, but he did force this to happen:
“The auto giant will also immediately begin buying back $5 billion worth of stock. The share repurchase, coupled with an additional $5 billion in dividend payments between now and 2017, is scheduled to conclude before the end of 2015.”
So – yes the vehicles are a lot better than they were previously. But, as an investor, unless I wanted share price to go sideways (maybe), and collect a 5% dividend in the meantime, I think there are better opportunities, given the unknowns.
Unless I was a VP, and could exercise my options at an artificially-depressed price.
But right now, retail investing in GM is a bit of a fool’s errand. Hedge fund managers are playing an entirely different game.
Bud this is a big picture game and when looking at investments you look at investment companies do in new product not for next year but for 5 years plus out. You look at coming product in the next coming 5 years and you look at income with the present products. GM is doing well in all areas for just coming out of what they just had.
Just like the drop in the market Monday only fools panic and bail then loose money. The real investors look long term and for future potential growth.
With the ignition deal pretty much behind. The Coming of some major new products at Chevy with the Cruze, Malibu and Nox along with the coming mid size SUV and other things you do not know about yet the earning turn around is well worth the investment at this point.
GM has some areas that still need work but they are not critical to their overall earnings and most are considered add on earnings. Russia is add on earnings. Europe with Cadillac add on earnings etc.
Opel and Holden are the two areas in need of work but coupled with Buick with the other two it should leverage out the product to help them all. With the new product coming to all of them it should be a marked improvement for each division.
China is added income at this point GM needed it in the past because they were upside down here but today that is reversed and while it could dent profits it will not make them unprofitable. Also GM only holds a 49% stake in the operations in China. If they hurt so does China so I expect the Chinese to manipulate the currency to lessen the losses.
You can sing the song of fear mongering on the future of GM but there are many good things going on and not much they can not deal with at this point. Even the fine they will see will only be a slight blip in the BIG PICTURE.
GM has survived much worse with much less going right and I really do not see any major set backs here that will put them back there at this time.
FCM is the one I have on watch as Sergio has some crazy goals and unreasonable expectations. He will kill Chrysler to save Alfa who will fail in the end. Fiat is not doing anything for them. Jeep is doing well as is Ram but the profits are going to Alfa and not to Chrysler who can turn the volumes they need.
I agree, five years is a reasonable window for investing.
I don’t think anyone above said anything about a one-year window.
This much We know is fact, not opinion, given your five-year time frame:
IPO, 2010: $33.
Five years later: $27.
Unknowns: Union issues. China. Europe. India. Russia. Ignition switch fines.
Nobody mentioned FCA, so I don’t know why you drag them into the conversation.
Will GM survive? Again, I didn’t see GM’s survival mentioned by anyone but you. But yes, they’ll survive.
Do I want to go bottom fishing under the circumstances?
As an investor, no; day traders looking for a blip, hedge fund cowboys with their own interests at heart, they’re welcome to it. Be my guest.
But as a fisherman, my experience is bottom fishing is where you catch carp, and bullheads, and snapping turtles
A negative 18% over five years speaks for itself. I wish them the best.
If you’re super-committed, and feel like market timing is your ally, it’s pretty simple:
Buy 5000 or 10000 shs of GM. Give us a quarterly update for five years.
I’m sure it’ll be a learning experience for all of us. A 20% return per year, for the next five years would be a substantial sum.
And since you bring up FCA, take a short position in that.
So – go get ’em. And best of luck!