The fallout from the ignition switch recall and other safety-related problems cut deeply into General Motors’ profitability for the second quarter, the maker reported.
Net income for the March to June period tumbled to just $200 million, or 11 cents per share, compared to a $1.2 billion net for the second quarter of 2013. The GM balance sheet was hammered during the latest period by one-time costs, most of them related to ongoing recalls, as well as for setting up a new victims’ compensation fund. Earnings before the recall-related charges would have been 58 cents a share.
“The ignition switch put tremendous pressure on our earnings,” GM chief executive officer Mary Barray told analysts and reporters. “But nevertheless we remained profitable.”
Barra also said the sweeping recalls, which so far this year cover 29 million units, have not deterred GM from pushing ahead with its effort to improve its competitive position around the world.