General Motors continues to put an epic year of recalls in the rearview mirror. After recalling 30 million vehicles and providing compensation for the families and victims of its massive ignition switch defect, the car company has announced it can now put a price on 2014’s recallapalooza: $2.8 billion.
The New York Times reports that GM spent $2.8 billion last year on penalties, repairs and a victim’s compensation fund all related to the company’s more than 80 recalls in 2014.
Among the recall costs, GM says it spent $400 million on an ignition switch victim’s compensation fund (although that price could increase in coming months) and an $874 million charge for the cost of future recalls.
Despite the hefty recall bill, GM still managed to pull off a rather standard year, selling a record 9.92 million cars and recording a net income of $2.79 billion.
Officials with the company say they were able to recover some of the recall expenditures during the last few months of the year.
“A strong fourth quarter helped us deliver very good core operating results in 2014 despite significant challenges we and the industry faced,” Mary Barra, GM CEO, said.
In addition to announcing revenue for 2014, the Times reports that GM will give its union workers profit-sharing checks that exclude the costs of the recalls. Each of the company’s 48,000 union wooers in the U.S. will receive a payout of up to $9,000, based on the company’s earnings.
The Times reports that the decision to subtract recall costs from the workers’ profit-sharing came after weeks of discussions between G.M. and the United Auto Workers union.
Officials with GM said the $9,000 figure was a combination of regular profit-sharing plus a $2,000 performance bonus that the company chose to add to the payout package.
G.M. Reports $2.8 Billion Profit in 2014 [The New York Times]
by Ashlee Kieler via Consumerist
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