GM faces $10 billion (Rs 60,000 crores) class action lawsuit
General Motors has been sued for $10 billion over potentially lost resale value. The spate of recent recalls has had a catastrophic effect on the brands image and reputation which has in-turn downgraded value of all GM vehicles.
This $10 billion lawsuit levied on General Motors has been brought forward by Hagens Berman Sobol Shapiro in Federal Courts in the Central District of California alleging that all owners of new General Motors products have had to contend with lost value of vehicles. It may be remembered that ever since the start of this year, General Motors has had over 40 recalls affecting over 20 million cars and trucks globally for assorted reasons and safety issues out of which recalls affected 17.7 million vehicles in the US itself.
The lawsuit could represent a total of 15 million users of General Motors cars as they seek $10 billion (approximately Rs 60,000 crores today) in damages. This lawsuit is based on an estimate that though it has affected the image and value of recalled cars, even non recalled cars from General Motors has been downgraded from anywhere between $500 to $2,600 per vehicle.
General Motors on their part have not commented on the lawsuit and continue to hold its good brand value in high esteem, which has seen increase in sales and revenues over the past year which grew 1.4% over year to $37.4 billion. GM has also drawn attention to various initiatives taken by the company to deal with recalls. Ignition parts of 400,000 Cobalt have been shipped and are to be made available by October while the company has also appointed 100 customer engagement representatives to oversee that all recalled vehicles are promptly brought to service centres and repaired instantly.