General Motor’s problem with the way it handled the timing of the ignition switch recall is getting more and more serious, as a source familiar with the proceedings has told Reuters the company is facing potential criminal charges.
The source, declining to be identified because the matter has not been revealed to the public yet, said the New York federal prosecutors are examining whether General Motors is liable for failing to properly disclose (and actually concealing it for 10 years) the condition that has been linked to 13 deaths.
“The immediate financial impact is insignificant; however, there could be some reputational risk which could impact share,” RBC Capital markets analyst Joseph Spak said. “Obviously, the longer this stays in the headlines the worse it could be for GM,” he added.
The federal probe ads to the growing number of investigations GM faces: it’s under scrutiny by an own internal probe ordered by the new CEO, Mary Barra, the National Highway Traffic Safety Administration (NHTSA) opened its own investigation and most recent the US House Energy and Commerce Committee is putting under scrutiny both GM and the NHTSA, with a two weeks term to give up any information on their customer responses regarding the problem.