However, the stock‘s fortunes took a sharp turn for the worse on October 5, plunging below $30, its lowest point in three years. The company’s shares slightly recovered later, closing at $30.3, although still down on the day.
At this price level, GM sits 54% down from its high of more than $62 reached in early 2022, market strategist Charlie Bilello pointed out on October 5.
“General Motors stock hitting a 3-year low today, down 54% from its peak in early 2022. It has made no gains over the last 12+ years (total return, including dividends).”– Bilello said.
Why is GM stock down today?
On Friday, October 5, shares of GM fell below the $30 threshold for the first time in three years.
The dip came on the reports of a potentially expensive airbag recall for the US carmaker, and continuing strikes by the United Auto Workers (UAW) union.
Notably, the Wall Street Journal reported that GM has at least 20 million vehicles equipped with a potentially dangerous airbag part. The US government said the cars should be recalled before people get hurt.
The possible recall of around 52 million air-bag inflators from the auto supplier ARC Automotive had been reported earlier in the year, although the number of affected GM vehicles was unknown at the time.
As a result, the National Highway Traffic Safety Administration held a public meeting on Thursday, concluding that the air-bag parts are defective and need to be recalled.
GM has recalled roughly 1 million cars due to this issue, stating it “believes the evidence and data presented by NHTSA at this time does not provide a basis for any recall” beyond those the company has already carried out.
GM says it lost $200 million due to union strikes
Meanwhile, the members of the United Auto Workers union remain on strike as the agreement with major automakers including GM is yet to be reached.
Last month, thousands of UAW members went on strike at three GM, Ford Motor, and Stellantis plants after failing to agree on a new labor contract.
Since the strikes began on September 15, GM’s shares fell by around 10%, and have witnessed just five positive trading days out of 14 sessions.
GM said on Thursday it has made a counteroffer to the union – the sixth one since the start of negotiations. The move came a day after the carmaker said it incurred $200 million in production losses in Q3 due to the strikes.
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