autoevolution
 

GM Recall Costs Totaled $1.5 Billion In the Second Quarter, Profit Falls 85 Percent

Although the American company announced $0.2 billion second quarter net income attributable to common stockholders, the actual net profit is $190 million, translating to an 85 percent drop compared to the $1.26 billion General Motors posted in Q2 2013.
GM logo 1 photo
Photo: GM
With the 6 recall campaigns announced yesterday, General Motors' 2014 recall tally currently totals 28,767,143 vehicles. So it's no wonder that 1.2 million green dollar bills were redirected toward fixing those damn cars affected by a wide range of defects, including the faulty ignition switches.

Besides the costly fixes, the automaker has also took 2 pretax charges linked to the 60 safety recalls announced to date. Namely, $400 million have been allocated to the compensation fund created for victims of ignition switch related accidents, while $874 million were allocated for recall expenses of the next 10 years. Don't know about you, but $874 million are definitely not enough for the decade.

"Our underlying business performance in the first half of the year was strong as we grew our revenue on improved pricing and solid new vehicle launches," said GM CEO Mary Barra. "We remain focused on keeping our customers at the center of all we do, and executing our plan to operate profitably in every region of the world."

General Motors reports that a $39.6 billion net revenue has been recorded in the second quarter, which is $500 million better than the same period last year. As for the first half of 2014, GM revenue hiked to $77 billion, a $1 billion improvement compared to the first six months last year. If you want to go into further details, please check out the press release attached below.
If you liked the article, please follow us:  Google News icon Google News Youtube Instagram X (Twitter)
press release
About the author: Mircea Panait
Mircea Panait profile photo

After a 1:43 scale model of a Ferrari 250 GTO sparked Mircea's interest for cars when he was a kid, an early internship at Top Gear sealed his career path. He's most interested in muscle cars and American trucks, but he takes a passing interest in quirky kei cars as well.
Full profile

 

Would you like AUTOEVOLUTION to send you notifications?

You will only receive our top stories