General Motors (GM) has been in the news quite a bit lately, with the company announcing on June 30 that it will conduct six new safety recalls in the United States involving approximately 7.6 million vehicles from its 1997- to-2014 model years.

The Detroit company expects to record a charge of up to $1.2 billion for the quarter ended June 30 for the cost of those recall-related repairs and for other recall-related repairs that it announced during the past three months.

That anticipated $1.2 billion charge does not include any future charges that General Motors might incur to settle claims related to injuries and deaths that were suffered by persons involved in automobile accidents as a result of ignition switch failures in the company’s automobiles.

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In regard to those potential charges, General Motors CEO Mary Barra announced on April 1 that the company had hired Kenneth Feinberg as a consultant to advise the automaker on how to respond to families of accident victims associated with the company’s faulty ignition switches. Feinberg is the same attorney who oversaw compensation issues related to the 9/11 terrorist attacks and the BP oil spill in the Gulf of Mexico.

Feinberg said that GM’s executives have given him full authority to pay accident victims of those faulty ignition switches from a special compensation fund that was established by the company.

According to General Motors, Feinberg will determine payment amounts using a modified version of the Bureau of Labor Statistics calculations for economic losses associated with human tragedies. General Motors will accept applications from any accident victims who are seeking compensation from Aug. 1 to Dec. 31 of this year. Feinberg said there is no limit on the amounts that he can award for individual claims, nor on the total amounts that he can award.

Although General Motors is clearly trying to resolve any financial obligations that it might face regarding its faulty ignition switches, the company took 10 years to address that issue.

Specifically, GM first discovered problems with its ignition switches with the launch of its Chevrolet Cobalt during November 2004. Several months later, the company said that several Cobalts were losing engine power, including instances in which ignition keys moved out of the run position when a driver contacted a key or steering column inadvertently.

During December 2005, GM issued a technical service bulletin regarding that issue to its dealers for the 2005-2006 Cobalt, 2006 Chevrolet HHR, 2006 Pontiac Solstice and the 2003-2006 Saturn Ion. During October 2006, the company updated the bulletin to include 2007 models of those cars, as well as for the then-new Saturn Sky and Pontiac G5.

Although I expect any compensation charges regarding General Motors’ ignition switches to have no material impact on the company’s operations, I expect a likely continuation of the media’s coverage of the way in which GM handled that matter over the previous 10 years, as well as its likely coverage of any future accident-related compensation claims, to have a substantial negative impact on the way that car shoppers view General Motors.

Specifically, I expect those factors to negatively impact General Motors’ sales in a way similar to the way that Ford’s recall of its Explorers during 2000-2001, which were equipped with faulty Firestone tires, negatively affected Ford’s sales for several years during the early 2000s.

While the ignition switch defect is a blow to General Motors’ reputation, the way in which GM has responded to the deaths associated with those defects is more damaging to the company.

For example, the company has refused to disclose information about any of the accidents in question and they’ve shown reluctance to talk to accident survivors and relatives of the deceased. Yet, investigative journalists have identified 12 deceased victims who died from single-vehicle crashes in which drivers of the company’s cars lost control, leading to head-on collisions with stationary objects. In all of those incidences, vehicle air bags in General Motors cars did not deploy, indicating vehicular power failures.

While far fewer deaths have reportedly resulted from GM’s faulty ignition switches than those that were associated with Ford’s faulty Firestone tires, the potential for a public backlash is far greater than during the early 2000s. That’s because the widespread use of social media outlets, such as Facebook and Twitter, has fostered a spirit of discontent against corporations who misuse their power.

And, this is not a time that General Motors can afford such a backlash, with its automotive revenues rising by a mere 1.2 percent and its net income declining by 13.1 percent for the year ended Dec. 31, 2013, as compared to the prior year.

That trend continued into the first quarter of this year, with the company’s net income declining by 76.4 percent for the three months ended March 31 as compared to the same period a year ago.

With the General Motors’ stock closing at a price-to-earnings (“P/E”) multiple of 17 on July 1, and my research indicating that the company will grow its net earnings per diluted share at an average annual rate of no faster than 10 percent over the next three years, I would advise investors to avoid GM and for aggressive stock market speculators to sell the company’s stock short. GM stock closed at $37.74 Wednesday.

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David N. Frazier has an extensive background in the investment securities industry and has invested in the financial markets for more than 25 years.

In addition to working as a business analyst, merchant banking analyst and equity research analyst, he’s held positions in sales and marketing at institutional investment firms, including William O’Neil & Co., TDAmeritrade, and Merrill Lynch.

David now serves as the President and Chief Market Strategist of Frazier & Mayer Research, LLC (dba www.TheMarketMonk.com), an independent investment research firm that provides research and analytical services to hedge funds, investment advisory firms, and other investment newsletters.