While General Motors is on hostile ground following its handling of the ignition switch defect recall and its stock has been depreciating, investors keep their hopes up and are confident in the automaker’s ability to come up on top.
While GM has been facing public and institutional outcry over the way it handles the recall on a defect they first found about in 2004 (and sources say even back in 2001 they knew), the company has lost north of $3 billion in stock value.
“Why in the world they didn’t deal with it back then is beyond me, but it seems to me now that they’re doing the best job they can given the circumstances,” said Scott Schermerhorn, chief investment officer of Granite Investment Advisors, which oversees $600 million and as of Dec. 31 owned 464,469 GM shares. “Barra is being very candid.”
“It’s a little silly that it’s traded off to the extent that it has,” said Matthew Moran, a fund manager at River Road Asset Management. “The new CEO is doing a fine job, and I’m very optimistic about her abilities to lead this company.”
The shares of the No.1 US automaker have been steadily declining since March 7 when the recall crisis turned into a scandal, with GM expanding the recall and the federal government opening a probe. On the other hand, based on its 2013 evolution, last year the stock was up 42% – thanks to the company reaching a record profit in North America.
by Aurel Niculescu
) - Tuesday, April 8th, 2014 - filed under General Motors
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Discuss: GM’s investors still confident in the company