Financial News

  • 25 April 2014, 14:12

GM Profit Skids To A Halt Due To Recalls

General Motors (GM) has seen its first-quarter profit plunge 85%, due to a series of vehicle recalls.

America's biggest car maker said net profit was $125m (75m) for the first three months of the year.

The company was hit by a $1.3bn (775m) charge for the cost of a worldwide recall of seven million vehicles.

The Detroit-based firm said it also spent $300m (180m) for its ongoing restructure of its European operations.

Net revenue in the first quarter was $37.4bn (22bn), up 1.35% from the first quarter of 2013.

"The performance of our core operations was very strong this quarter, reflecting the positive response of customers to the new vehicles we are bringing to market," GM chief executive Mary Barra said in a statement.

"Our focus remains on creating the world's best vehicles with the highest levels of safety, quality and customer service, while aggressively addressing our business opportunities and challenges globally."

GM has also been hit by successive investigations and legal actions because of a delay in recalling cars with a potential ignition switch fault.

The problem has been linked to 13 deaths in the US and a number of injuries.

The problem was first spotted in pre-production in 2001, however it was not until early 2014 that it instigated a recall.

It appointed a new head of safety and Ms Barra was called before a Senate hearing to testify about the cars.

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