Recall Costs Obliterate GM First Quarter Profits

General Motors' recall crisis virtually wiped out its profit for the first three months of the year, as it said Thursday that the cost of repairing millions of vehicles would come to $1.3 billion.

The cost of the recall and some other accounting charges left the company with a profit of only $108 million in the quarter.

The company recalled a total of 7 million vehicles during the quarter, most prominently 2.6 million with a faulty ignition switch tied to at least 13 deaths. GM said it would spend about $700 million to fix that ignition switch, and another $600 million on other recalls.

TheSteve - 4/24/2014 12:48:34 PM

+1 Boost

This reminds me of the joke in which a bean-counter reports to The Board, "Our stellar profits would have continued, had we not discovered the faulty calculator in the Accounting department."

The reality is that GM has only given the *appearance* of being profitable by cutting essential services and their associated costs, operating in an "ethically questionable" manner.

MrEE - 4/24/2014 6:55:31 PM

+1 Boost

Wait for the lawsuits to start rolling in.

HughJass - 4/25/2014 7:58:47 PM

+1 Boost

Which candide is willing to offer up a bailout to win the 2016 elections? It worked for Obama, will work for whoever else decides to payoff the unions.

I'm sure glad we decided to waste money by saving GM instead of making them operate like Ford.