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General Motors Company Message Board

  • cheblammo cheblammo May 25, 2014 9:12 AM Flag

    An Excellent and Thoughtful Article

    On Seeking Alpha this morning by Ray Merola. In it, he compares the Toyota unintended acceleration recalls with the current GM switch recalls. He summarizes by pointing out that Toyota's market cap got whacked by $35 billion as a result, but in the end, the total costs were in the neighborhood of $4 billion. Since then, Toyota's stock price has fully recovered, as has, for the most part, their reputation.

    In the case of GM, $13 billion has been chopped from market cap. While it's impossible to know, at this point, precisely what the total cost will be to GM, it seems likely it will be similar to that of Toyota. I would add that GM was starting from a much lower place, in terms of reputation, than Toyota. Whether that means the recovery time will be shorter or longer remains to be seen.

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