GM Profits Plunge In Q2 Due To Recall Costs

General Motors today posted an 85 percent drop in second-quarter net income, hurt by recall-related expenses including a special charge of $400 million for the cost of a program to compensate victims of GM’s faulty ignition switch.

Costs related to GM’s unprecedented spate of safety recalls, along with special items, sliced GM’s net income for the April-June period by about $1.5 billion net of taxes, down to $190 million, from $1.26 billion in the year-earlier period.

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Agent009 - 7/24/2014 10:23:41 AM

0 Boost

If GM was not given tax cuts after the bailout, they would most likely be losing money this year.

If this continues get ready for more concessions from the tax payer

Vette71 - 7/24/2014 12:51:46 PM

+2 Boost

Huh? Taxes are paid on operating profits. If you don't make an operating profit you don't pay taxes. The deal the government gave GM and the other companies that went through a government sponsored bankruptcy was they could keep their tax loss carry forward(which reduces current taxes owed) which they normally wouldn't. All this means is that IF GM makes an operating profit this year they will pay less in taxes, but they still have some net profit, not a loss. If GM reports a loss it will be from the business not performing. Expect to see a lot of write offs this year. When the profit news is bad, companies will clean out the cupboard of similar issues.