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July 1, 2014

Another GM Recall

The next 8 million vehicles.

General Motors has issued yet another recall, this time of 8.45 million vehicles, pushing their total this year to 28 million worldwide. The affected models date back to 1997, and the primary defect is the infamous ignition switch. The latest recall will cost $500 million, on top of the $700 million the world’s largest automaker already spent on recalls in the second quarter. The scandal here is GM knew about the faulty switches years before taxpayers were forced to bail them out, all while doing little to correct the problem. The National Highway Transportation Safety Administration (NHTSA) learned of the defect during the bailout, and the Treasury Department conveniently sold off the last of its GM stock in December – before the recalls began. We suppose it’s fortunate taxpayers weren’t on the hook for the cost of the recall too, but that’s insider trading at its finest and a perfect example of why government should not have an ownership stake in a company.

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