GM's profit falls on recall costs and victims' compensation fund

Thursday 24 July 2014 12.56
Net income in the quarter fell to $190 million
Net income in the quarter fell to $190 million

General Motors reported a lower second-quarter profit due to numerous recalls and the expected cost of at least $400 million for its victims' compensation fund.

The victims' compensation fund was set up for those killed or injured by a defective ignition switch linked to at least 13 deaths.
              
Net income in the quarter fell to $190 million, compared with $1.2 billion a year earlier.              

One-time items in the quarter totalled 47 cents a share. The quarter included the charge for the establishment of the victims' compensation fund, which GM said could rise by about $200 million, as well as an $874 million charge for a change in how the company will account for recalls.
              
Not counted as one-time items were previously disclosed costs of $1.2 billion for GM recalls, which have covered almost 29 million vehicles so far this year. GM also has $200 million in restructuring costs.
              
Excluding one-time items, GM earned 58 cents a share.

Keywords: general motors