GM stock has fallen nearly 49 percent from its 2021 ATH as the automaker struggles to strike a deal with the UAW union amid a potential recall of more than 1 million vehicles for faulty airbags.
General Motors Company (NYSE: GM ) shares closed at $30.31 in Thursday trading, down 2.35 percent from the day’s opening price. The company’s stock price has been declining since the beginning of last year, with a high chance of hitting COVID-19 lows again if the company does not bounce back to current conditions. In particular, thousands of members of the Union Auto Workers (UAW) union went on strike last month after failing to reach agreement on a new labor contract.
Earlier this week, the company noted that its dealers delivered 674,336 vehicles in the United States during the third quarter, up nearly 21 percent year-over-year. However, this quarter’s production may be significantly impacted due to the ongoing UAW union strike, which is taking longer to resolve.
GM production conditions may face more major challenges after a WSJ report suggested that as many as 20 million vehicles delivered to customers may have defective airbags. The US National Highway Traffic Safety Administration issued a possible recall alert to avoid any injuries or deaths.
Currently, the company has recalled 1 million vehicles with airbag problems and reiterated that there is no basis to recall more vehicles. Nonetheless, the company indicated that it is working closely with NHTSA and other manufacturers to ensure a long-term solution to the airbag problem.
“Despite eight years of study and investigation, neither the affected vehicle manufacturers nor NHTSA have identified a systemic design or manufacturing defect in ARC frontal airbag inflators,” the company said. noted, “If GM concludes at any time that any unattended ARC inflators are unsafe, the company will take appropriate action in cooperation with NHTSA.”
General Motors (GM) and Market Outlook
To resume its normal operations, General Motors confirmed that it has made a counter-offer to the UAW union. This came after the company indicated that it had suffered a loss of approximately $200 million due to the ongoing strike. However, the UAW union has consistently refused to make any deal until its contract is fully completed, worsening the impasse.
“We believe we have an attractive offer that will reward our team members and allow GM to succeed and grow into the future. “We are ready and willing to negotiate in good faith 24/7 to reach an agreement,” the company said recently.
The $42.71 billion company faces tough competition from established electric vehicle companies Tesla Inc (NASDAQ:TSLA) which does not support the UAW union. As a result, the company’s stock market will face more selling pressure in the coming quarters, which could significantly reduce its valuation.

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