GM 2Q Profit Falls 85 Percent On Recall Costs

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(Photo Credit: Stan Honda/Getty Images)

(Photo Credit: Stan Honda/Getty Images)

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  autos arrows plug v2 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 This material may not be published, broadcast, rewritten, or redistributed.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.

 

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