By on April 25, 2014

Mary-Barra-Chevrolet-Cruze

Reuters reports General Motors announced in its regulatory filing Thursday that it was under the microscope of five different government agencies related to its numerous recalls as of late. Aside from investigations by the U.S. Attorney’s Office for the Southern District of New York, the National Highway Traffic Safety Administration, and both houses of Congress, the automaker revealed the Securities and Exchange Commission and an unnamed state attorney general’s office were conducting their own probes. The filing also acknowledged GM was under the gun of 55 pending class action lawsuits in the U.S., and five of the same in Canada. GM said they were working with all of the investigations, though the automaker did not say what the SEC was looking for in its probe.

Speaking of Congress, The Detroit News reports the chairman of the U.S. House Energy and Commerce Committee, Rep. Fred Upton of Michigan, is readying the committee for a second round of hearings regarding GM’s handling of the February 2014 recall of 2.6 million 2003 – 2007 vehicles affected by the ignition switch issue which took over a decade to resolve. Though the committee is still poring over 300,000 documents related to the recall in preparation, Upton wasn’t sure if CEO Mary Barra would return to answer more questions, nor did he think it was good for public relations for the automaker to attempt to reinforce its liability shield before bankruptcy court. No date or topic for the hearing has been set thus far.

As for how hard the recalls hit GM’s bottom line, Automotive News says the automaker barely made a net profit for Q1 2014. With the aid of surging transaction prices on trucks offsetting losses linked to the various recalls, currency challenges in Venezuela, and ongoing issues in Europe, GM made $125 million during the first three months of the year. Barra told those on the call that while there have been setbacks as of late, the automaker’s overall progress was “sure and steady.”

Meanwhile, Reuters reports supplier Delphi reported a stronger Q1 2014 than had been expected, pulling a net profit of $320 million on the high demand of parts in Asia and North America. The supplier, responsible for the out-of-spec switch at the heart of the main recall, is working with GM to supply replacement switches for the affected vehicles.

Finally, The Detroit News reports Barra is one of Time magazine’s annual list of the 100 most influential people for 2014. The CEO cited her parents as major influences in her life, stating they taught her and her brother both “the value of a hard day’s work” and “the power of integrity,” adding they “continue to guide [her]” on a daily basis. In addition, former Chrysler CEO Lee Iacocca penned the following about Barra for her profile in the magazine:

Only time (and the pundits) will judge Barra and the kind of job she’ll do for GM, its board of directors, its employees, the dealers and, most important, the people who buy its cars. If she remains as forthcoming as I’ve seen her on television with Congress, she will enjoy a long tenure at the helm.

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28 Comments on “GM Pulls Small Q1 2014 Profit, Barra One Of Time’s 100 Most Influential People...”


  • avatar

    maybe Lee doesn’t watch SNL?

    • 0 avatar
      Syke

      Making fun of somebody and/or a situation is cheap and easy.

      Straightening out the mess and trying to minimize it ever happening again – now, that’s the real work. Usually completely beyond the abilities of those who can pen quick and easy satire, or throw literary brickbats.

  • avatar
    thornmark

    Ford isn’t doing so hot either as its US sales fall and operating margins have been halved:

    Ford Earnings Weak Around the World
    http://247wallst.com/autos/2014/04/25/ford-earnings-weak-around-the-world/

    Mullally is getting out w/o fixing Ford’s strength/weakness, its reliance on one product for profits. And now GM and Chrysler are willing to do what it takes to sell their offerings with the prospect that margins will come down drastically.

  • avatar
    Johnny Canada

    I don’t believe for a second that Lee Iacocca wrote that; perhaps a press agent, personal assistant or PR department.

    • 0 avatar
      Pig_Iron

      In addition, former Chrysler CEO Lee Iacocca penned the following about Barra for her profile in the magazine:

      “I’m going for a piss, and by the time I get back, I will judge Barra and the kind of job she’ll do for GM; and that goddamned transmission had better be in production”

      ;-)

    • 0 avatar
      Lorenzo

      No, he’s the type who would respond like that to a press inquiry. It’s basically a non-committal short response with conditional praise and no sour grapes that could cause a backlash to his reputation. You have to be part politician and part press agent to get as far as he has in life.

  • avatar
    raresleeper

    There’s something damned sexy about a woman CEO.

    However, at the risk of sounding chauvinistic, I can only imagine that living with one would be a chore after a while.

    You see, as a man, I like wearing the pants in my household.

    However, a $1m+ salary and massive stock options might make me a little more tolerant of my misses delegating duties to me all day long.

    • 0 avatar
      Drzhivago138

      Who says the salary should determine who has “superiority?”

      • 0 avatar
        raresleeper

        I dunno if your white-collar management or not, but a CEO’s pretty high up the corporate ladder there, Ace.

        With responsibilities like that, trust and believe, buddy, her “authority” is leaving the office and coming home to you every night. Nothing to do with salary.

        But, on the positive note, millions in the joint account should help ease the pain of dealing with the added pressures of her bringing her responsibilities and stresses home to you every night.

      • 0 avatar
        philadlj

        Him.

  • avatar
    mikey

    Off topic a bit guys, but trust me on this one. 41 years with the same lady tells me that neither side should have “superiority”

    Perceived or otherwise.

    • 0 avatar
      KixStart

      +1

    • 0 avatar
      chuckrs

      Mikey, at a mere 40 years and 8 months with the same lady, I’ll defer to your wisdom. And certainly agree with it.

      It probably is tough to be Mr. Mary Barra, but if their work roles reversed, it would be tough that way around, too. Its a rare individual who could run a division of a major enterprise and leave work at work, let alone running all the divisions.

    • 0 avatar
      highdesertcat

      LOL, Mikey! In my 49+ years with the same gal I have decided that, even though I wear the pants in my family, HER money is her money, OUR money is her money, and MY money is her money as well.

      But I also think that the US lawmakers will go easy on Mary Barra; a lot easier than they would have been on a male GM CEO, and certainly easier than they were on Mr Akio Toyoda during the trumped-up SUA debacle.

      So, maybe, just maybe, there was a lot more than meets they eye about the appointment of Mary Barra as GM’s CEO, because had the Board appointed another man, everyone, including the US lawmakers, would have gone ballistic on him for GM’s obfuscation, misdirection, misinformation and denial of GM’s current recalls and engineering failures.

      • 0 avatar
        raresleeper

        Bravo!!!!

        The truth, Sir… you speak of it.

        Mary Barra is softspoken and cuddly in the eyes of Uncle Sam and the NHTSA.

        Yet, behind closed doors, she rules with an Iron Fist, making it rain FIRE and BRIMSTONE, while simultaneously listening to AC/DC’s “Hell’s Bells”.

  • avatar
    philadlj

    As long as the vehicles they are building NOW do not have the kind of secret problems that will crop up a decade later after more drivers are killed, I believe Barra and GM are going to weather those recalls and lawsuits just as they weathered bankruptcy and government ownership.

    It’s also interesting that despite the new Silverado/Sierra’s reputation as a milquetoast contender in the segment, GM owes much of its modest profit to high transaction prices on trucks.

  • avatar
    APaGttH

    Post bankruptcy when certain B&B were fixated on marketshare, I know others were saying they would prefer this…

    …says the automaker barely made a net profit for Q1 2014. With the aid of surging transaction prices on trucks offsetting losses linked to the various recalls…

    I don’t care if GM sells 30% of the Impalas they use to sell when they were W-bodies. If they’re making mad profit on the reduced volume that sure as heck beats selling them at a loss.

    You can’t have it both ways – as much as people want. The same people that complained about GM’s lack of profitability 7 years ago are the same people complaining about their products being over priced.

    It ain’t a charity.

    Now as for the quality of those products – and how they meet the customers needs – that’s a whole different discussion.

    • 0 avatar
      KixStart

      I don’t know that the B&B were particularly fixated on market share (there’s actually a variety of opinions here, in case you hadn’t noticed) but it kind of doesn’t matter what we fixate on, it’s how GM executes that’s important.

      GM itself, prior to BK, was fixated on volume (share) at all costs. That didn’t end well. Culture is hard to change.

      If they’re able to sell lower quantities at a higher ATP and make equal or better money, then that is great. Share is a good thing to have but profits are more important. Well, share is a good thing to have partly because it suggests sustainability of units, revenue and therefore profits.

      Falling share can also be a sign of distress, absent other factors.

      As regards the current quarter, backing out special charges and adjustments, GM probably made over 70 cents per share, which is promising.

      However, GM has done smoke and mirrors before; we need to see some long-term results before we know what’s really going on.

      • 0 avatar
        APaGttH

        I did write, “when certain B&B were fixated,” not all.

        Just sayin’ – I don’t think I was painting with a broad brush. And there are some regulars in the B&B that are quite fixated on marketshare and GM.

    • 0 avatar
      28-Cars-Later

      “The same people that complained about GM’s lack of profitability 7 years ago are the same people complaining about their products being over priced.”

      Maybe, but some GM product is incredibly overpriced. I say cut costs further or go home.

      • 0 avatar
        APaGttH

        …but some GM product is incredibly overpriced…

        You won’t find me defending ELR pricing, or Suburban LTZ pricing, or a loaded out Impala LTZ pricing, or XTS V-Sport pricing, or…

        But on the other hand – if GM is selling less Silverados/Sierras but making a bigger killing on each one they sell – I’m all for it. That’s like having your cake and eating it too.

        Less truck volume means less dependency on overall profits from large truck sales for success, as they make up a smaller percentage of the total product mix. However the bigger bucks per unit makes up for the smaller volume. In this case – despite the Silverado/Sierra woes due to boring design and lack of innovation – it saved their bacon…this quarter.

  • avatar
    TomHend

    A national Rasmussen Reports survey has found that an all-time high
    53 percent of all Americans believe that neither major political party “represents the American people”.

    • 0 avatar
      highdesertcat

      Yup, I agree! I started life as a Democrat. Became a Republican when I got my first job and started to pay taxes. I became a registered Independent when I retired from the Air Force. What I found was exactly that; neither major political party “represents the American people”.

      Now I vote for the candidate that reflects MY beliefs, regardless of political party affiliation.

      • 0 avatar
        Lorenzo

        “Now I vote for the candidate that reflects MY beliefs, regardless of political party affiliation.”

        But if everybody did that, politicians in Washington would be listening to a million different voices, back room deals would be impossible, and the government would be paralyzed. Hmm. Sounds like a plan.


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