GM 2Q Profit Falls 85 Percent On Recall Costs

DETROIT (WWJ/AP) – General Motors says second-quarter profit fell 85 percent as recall costs chopped $1.5 billion from the bottom line.

The automaker posted a net profit of $190 million, or 11 cents per share, including restructuring and recall-related expenses. A year ago GM made $1.26 billion, or 75 cents per share.

Without one-time items GM would have made 58 cents per share, equaling Wall Street’s expectations.

So far this year GM has recalled almost 30 million vehicles, a company record.

“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,” CEO Mary Barra said in a statement.

GM took a number of pretax charges tied to the recalls. They Include $400 million to compensate victims of ignition-switch related crashes; $874 million to account for recall expenses during the next 10 years; and $1.2 billion for recalls announced during the quarter. The after-tax impact of those items was $1.5 billion.

TM and © Copyright 2014 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2014 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.


blog comments powered by Disqus
Vietnam Veterans' Bond Forged Again With Kidney DonationServing together in Vietnam, John Middaugh and Henry "Bill" Warner forged an Army-brothers bond they knew was profound and lasting. A world and nearly a half a century away from the war zone where they'd counted on each other, Middaugh put himself on the line for Warner this month in a new way: by giving one of his kidneys.
Dr. Paul Bearer II Tombstone Tales | Halloween EditionOn Sunday, October 25th, Dr. Paul Bearer II returned to the Tenement Castle for an afternoon of HORRORble movies.

Listen Live