On Monday, the Supreme Court ruled against General motors over the ignition switch issue. That will likely have a negative impact on the stock for quite some time. In other negative news, the company announced that it had to shut down a plant in Venezuela. The good news is that General Motors made it out on top in March with the best automotive sales in its industry.

Supreme Court Ruling

The Supreme court turned away an appeal by General motors on Monday, to block a lot of lawsuits that it is facing. The reason for the lawsuits deal with the company’s faulty ignition switches found on many of the older model vehicles. The ruling stated that the 2009 bankruptcy of the company did not shield it from the liabilities for all the cases against it.

The Supreme Court upheld the ruling from the federal appeals court last year. The appeals court ruled that General Motors remained at fault for the faulty ignition switches. It stated that the company is still liable for all the deaths and injuries it caused, because it knew about the problem for decades and did nothing about it.

As a result of the faulty switch there were 124 deaths and 275 injuries. How does this ruling affect General Motor’s stock? The main issues is that there are slated to be an additional 1,000 or more lawsuits against the company.

The problem with that is that General Motors would be liable to pay between $5 to $10 billion in liabilities. In any capacity, the company losing billions of dollars does not bode well for its stock. It will be a huge overhang until all cases have been completely tried or settled.

Plant Shut Down

General Motors continues to face problems across the globe with other issues. Another issue announced on Monday is that it had to fire 2,700 workers because of a plant shut down. The reason for shutting down the plant was due to a seizure from the Venezuelan court.

The court ruled that there were two dealers that filed a lawsuit against General Motors. They stated that they had not received the agreed upon sale of up to 10,000 vehicles. It’s not as if the plant was producing much anyways. Workers revealed that before the plant seizure, General Motors was dismantling the plant.