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Why Did General Motors Ask for a Delay in Recall of Vehicles?

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Sep. 19 2016, Updated 1:15 p.m. ET

Price movement

General Motors (GM) has a market cap of $48.6 billion. It fell 0.48% to close at $30.97 per share on September 16, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 1.6%, -1.6%, and -5.5%, respectively, on the same day.

GM is trading 1.2% below its 20-day moving average, 0.03% above its 50-day moving average, and 2.5% above its 200-day moving average.

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Related ETF and peers

The Guggenheim Multi-Asset Income ETF (CVY) invests 0.96% of its holdings in General Motors. The ETF tracks the Zacks Multi-Asset Income Index. The index aims to outperform the Dow Jones US Select Dividend Index using US stocks, ADRs (American depositary receipts), REITs, MLPs, CEFs (closed end funds), preferred stocks, and royalty trusts. The YTD price movement of CVY was 7.1% on September 16.

The market caps of General Motors’ competitors are as follows:

  • Toyota Motor (TM): $194.6 billion
  • Ford Motor (F): $48.1 billion

Latest news on General Motors

In a September 16, 2016, press release, Reuters reported, “General Motors Co has asked U.S. safety regulators to a delay a recall of 980,000 trucks with Takata air bag inflators to allow it to demonstrate the vehicles are safe and avoid a hit to profits.”

The report also stated, “GM said on Friday a one-year delay would permit GM and an outside firm ‘to complete a long-term aging study and fully analyze the service life of these inflators.'”

Sales for General Motors in August 2016

General Motors’ (GM) sales performances in August 2016 were as follows:

  • General Motors reported total sales of more than 256,000 units, a fall of 5.2% from August 2015.
  • General Motors reported retail sales of nearly 213,000 units, a fall of 5.4% from August 2015.
  • Chevrolet reported total sales of ~176,000 units, a fall of 3.9% from August 2015.
  • GMC reported total sales of more than 42,000 units, a fall of 14.0% from August 2015.
  • Buick reported total sales of nearly 22,000 units, a fall of 2.7% from August 2015.
  • Cadillac reported total sales of more than 16,000 units, a rise of 3.9% from August 2015.

GM reported total sales of more than 1.9 million units YTD, which represents a fall of 4.2% from the same period in the prior year. Among the company’s segments, large van sales rose 18% in August 2016, and small business sales rose 3% YTD. It’s worth noting that daily rental deliveries fell 34.0% in August 2016.

In the next and final part of our series, we’ll take a look at McCormick & Company (MKC).

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