General Motors Just Made Another Huge Mistake

With lots of pressure on the auto manufacturer to disclose safety concerns, not showing all their cards was a big mistake.

Mar 30, 2014 at 5:00PM

The first quarter has not been a friendly one to the nation's largest auto manufacturer, General Motors (NYSE:GM). But the company's actions in the past few days may be the biggest catalyst for consumers to think negatively of GM.

Recall blues
For various reasons, faulty ignition switches in a number of GM vehicle models can be jostled out of the "run" position and into "accessory" or "off," which can disable power steering, power brakes, and airbags. Needless to say, its a dangerous situation for drivers -- more than 30 accidents and 12 deaths have been linked to the safety hazard. But he recall of over a million vehicles for faulty ignition switched is old news now.

Even the recent announcement from General Motors that it's expanding the recall to include newer model years isn't terribly concerning, since the company is taking a precautionary stance. The expansion is due to ignition switches sold to parts stores and dealer repair shops that may have been used on the newer vehicles during repairs.

The company has announced that replacement ignition switches will be available starting on April 7 for all model years of its Chevrolet Cobalt, HHR, Pontiac G5, Solstice and Saturn Ion and Sky, with all vehicles repaired by October of this year.

Customers are urged to follow the following instructions for the recall process:

Source: General Motors.

With the company taking huge steps to try to assuage customer concerns, including posting videos of CEO Mary Barra answering questions about the recall, one act may have just undercut any progress GM has made in rebuilding consumer confidence.

Cease and desist
On Friday, GM dealers received a stop-sale order from the manufacturer for the 2013 and 2014 Chevy Cruze, halting all sales of the vehicle. Though it's not uncommon for an automaker to halt sales if a safety concern needs to be fixed, General Motors omitted any information on why the stop-sale was necessary.

While dealers expect more news on the order early in the week, the lack of details may be enough to reinforce customer concerns about all GM vehicles. Though the company has assured consumers that the Cruzes that have already been sold are safe, there's little information for drivers to use to reassure themselves that the automaker is telling the whole story.

The biggest hit
There's no doubt that General Motors is in for a long run with the ignition switch recall -- not only with the actual repairs, but with and subsequent lawsuits and possible criminal investigations.

While safety concerns about any automaker's vehicles can be a business killer, the biggest problem with the GM recall debacle is the company's withholding of important information. First, the company takes 10 years to disclose the ignition switch problem, resulting in more than 2 million vehicles in question. Now, two current-year models of a popular vehicle are suspect.

Reputation counts for a lot within the auto industry, and with the recent stop-sale order lacking any information GM's may be taking another hit. But giving customers and investors a full weekend (or more) to hypothesize about the Cruze's problems, General Motors has really shot itself in the foot.

The Motley Fool's completely free car buying guide
You may not be considering a new GM vehicle these days, but the market is full of great cars ready to hit the road. But car buying can be a difficult activity, and there's plenty of data showing that you probably spent thousands more than you should have on your last vehicle. In fact, the auto industry can be such a dangerous place for consumers that our top auto experts are determined to even the playing field. That's why they created a brand-new free report on The Car Buying Secrets You Must Know. The advice inside could save you thousands of dollars on your next car, so be sure to read this report while it lasts. Your conscience, and your wallet, will thank you. Click here now for instant access.

Jessica Alling has no position in any stocks mentioned. The Motley Fool recommends General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers