General Motors 1Q profit dragged down by recalls - New York News

General Motors 1Q profit dragged down by recalls

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    Wednesday, July 23 2014 4:00 PM EDT2014-07-23 20:00:12 GMT
    General Motors issued six more recalls on Wednesday, bringing its annual total to 60 recalls covering almost 30 million vehicles.
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    Thursday, July 17 2014 7:19 PM EDT2014-07-17 23:19:37 GMT
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  • GM says it's replaced 491,000 ignition switches

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    General Motors says it has replaced faulty ignition switches on just under 20 percent of 2.6 million small cars that are being recalled. The company has repaired just over 491,000 cars that are covered by the recall announced in February.
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DETROIT (AP) -- General Motors on Thursday reported its worst quarterly performance in more than four years as the costs of a series of recalls dragged down earnings.

First-quarter profit fell 86 percent to $125 million. The Detroit automaker took a $1.3 billion charge for recalling about 7 million vehicles worldwide. GM also incurred $300 million in restructuring costs, mostly in Europe. And it took another $419 million charge due to a change in the way it values Venezuela's currency.

GM made 6 cents per share, down from 58 cents per share a year ago. The recall charge alone cut 48 cents off GM's first-quarter earnings.

Excluding one-time items, GM made 29 cents per share, far above Wall Street estimates of 3 cents per share.

It was a disappointing start to what many expected would be a strong year for GM. The U.S. government, which bailed out the automaker five years ago, sold its remaining stake in the company at the end of last year, freeing GM of the "Government Motors" nickname. In January, the company announced its first quarterly dividend in six years. And GM has rolled out multiple new models in recent months including high-profit pickup trucks and full-size SUVs.

But the recalls overshadowed the first quarter under the leadership of new CEO Mary Barra, the first woman to lead a major automaker. In February, GM announced it would recall more than a million older small cars because the ignition switches can slip from "run" to "accessory" or "off," shutting down the engine. That knocks out power steering and brakes and can cause drivers to lose control and crash. It also disables the air bags. Later, the recall was expanded to 2.6 million cars, and other recalls took the number to near 7 million.

GM admitted knowing about the problem at least a decade ago. Thirteen people have died in crashes linked to the problem, according to GM, although relatives of the victims say the death toll exceeds 30.

The financial results were GM's worst since late 2009, when it posted a $4.4 billion loss for the five months after leaving bankruptcy protection.

Even so, the company's revenue for the quarter was strong. GM took in $37.4 billion, up 1.3 percent from the year-ago quarter and in line with analysts' estimates.

GM's global sales for the quarter rose 2.3 percent to 2.42 million cars and trucks. China sales grew 13 percent, and sales in Europe rose less than 1 percent. But sales fell 2 percent in North America, GM's most profitable region. Sales fell 10 percent in South America.


The company's North America division earned $600 million. Without the recall charge, it would have earned $1.9 billion, up from $1.4 billion a year ago. Sales in the region fell to 745,000 cars and trucks.
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    Detroit Mayor Mike Duggan is promising big changes at the water department, starting with the controversial shutoffs."Certainly it has hurt the reputation of the city," Duggan said. "I have been anxious to do something about it for awhile and I am just glad I have a chance to do it,"Emergency Manager Kevyn Orr handed over the water department to the mayor and City Council TuesdayDuggan says better publicizing assitance programs is the biggest priority."I still don't think the people in need h...
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  • Construction worker rescued from massive trench collapse

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    Construction workers endured some terrifying minutes in a trench they were working at in West Bloomfield Tuesday afternoon."He was completely buried for upwards of three minutes," said Fire Chief Jay Wiseman.Employees of Daniel White Excavating were laying pipe in a trench -- about 100 feet long and 10 feet deep -- when suddenly , the dirt walls began collapsing on a 39-year-old co-worker and covered him."He actually started moving away from it, and an identical collapse occurred just in fron...
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  • Michigan girl mauled by raccoon receives wave of support

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    She told us all she wanted was to wear earrings -- and now she's got a lot of options. We'll show you how Charlotte is healing after surgery to replace her ear... and how you've made a difference. Her story includes a tragic accident, but also a tremendous outpouring of support. The 12-year-old girl from western Michigan who was attacked by a raccoon, shows us how the generosity of others is helping her heal. "This is all the jewelry people sent me," she said. Dozens of pairs of earrings and ...
    She told us all she wanted was to wear earrings -- and now she's got a lot of options. We'll show you how Charlotte is healing after surgery to replace her ear... and how you've made a difference. Her story includes a tragic accident, but also a tremendous outpouring of support. The 12-year-old girl from western Michigan who was attacked by a raccoon, shows us how the generosity of others is helping her heal. "This is all the jewelry people sent me," she said. Dozens of pairs of earrings and ...
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