U.S. to make 'major announcement' on GM recall probe; stock falls

Reuters

WASHINGTON (Reuters) - U.S. officials will make a 'major announcement' on Friday as part of their investigation into General Motors' handling of recalled vehicles because of defective ignition switches, the Department of Transportation said in a statement.

Shares of the automaker fell nearly 2 percent on news of the announcement, planned for 11:15 a.m. EDT (1515 GMT).

The Transportation Department, along with other U.S. agencies, is investigating the timing of the automaker's recall over the faulty switches, which have been linked to at least 13 deaths.

It plans to announce that GM has agreed to enter into a consent decree and will pay a substantial fine, CNBC reported.

GM engineers first discovered the defect in 2001 and the company has been criticized not recalling the vehicles earlier.

Congress, the Department of Justice, the U.S. Securities and Exchange Commission and several states are conducting their own investigations, and GM has an internal probe that is expected to be completed within the next two weeks.

It was not immediately clear how federal transportation officials' announcement would affect the other probes.

Representatives for GM had no comment.

The announcement Friday comes one day after GM announced a another five recalls covering nearly 3 million vehicles worldwide because of tail lamp malfunctions and potential faulty brakes.

(Reporting by Ben Klayman and Bernie Woodall in Detroit, and Richard Cowan in Washington; Writing by Susan Heavey; Editing by Bill Trott)

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