By on April 24, 2014

2007 Saturn Ion Red Line

Autoblog reports the first several thousand kits meant for repairing a handful of General Motors vehicles affected by the February 2014 ignition switch recall have been shipped off to dealers. In addition, 1.4 million recall letters have been mailed out to affected consumers of 2003 – 2007 vehicles; 2008 – 2011 affected owners will receive their letters in the coming weeks. The letters inform consumers to schedule the repair with their dealer, which GM claims will take 90 minutes to complete. Until the repair occurs, the automaker instructs all consumers to have nothing more than the key itself prior to insertion, and to be sure their transmissions and switches are set in place before removing the key.

In other recall news, Bloomberg says plaintiffs aiming to take down the liability protections established in GM’s 2009 bankruptcy exit — on the basis of bankruptcy fraud by omitting information about the out-of-spec ignition switch at the center of the ongoing recall crisis — may find the fight difficult at best. Bankruptcy lawyers told Bloomberg that they could request pre-trial evidence from GM to prove their case, but differ on statue of limitations being a factor in moving forward with the lawsuits. In the meantime, the automaker has asked Judge Robert Gerber — who ruled in the 2009 case — to reinforce the liability shield before more lawsuits can move forward. A conference with Gerber and GM is set for May 2 in Manhattan.

As for how GM is faring under the recall crisis since it began, Detroit Free Press says the automaker’s brand had taken more damage than Chevrolet in the first weeks of the recall, according to YouGov BrandIndex’s Buzz consumer survey. The automaker’s score, determined on a scale of -100 to 100 based on a compilation of negative and positive scores from consumers surveyed, fell from 9 in the first two months of 2014 to -33 before climbing up to -26; a score of zero means a 50/50 balance of negative and positive scores. Chevrolet, however, was at 19 before the recall took the division to -2 last week. The Bow Tie is holding at zero currently.

Though brand perception of GM and Chevrolet may be on the rebound, GM’s bottom line has yet to follow. Bloomberg reports Q1 2014 earnings may include a loss when CEO Mary Barra makes her earnings call Thursday. Compared to last year’s Q1 net profit of $1.18 billion, the automaker forecasts a loss of $1.3 billion from recalls affecting 7 million vehicles, as well as $400 million pretax charge due to Venezuela’s currency struggles, restructuring costs in Asia and South America, and losses from Europe. GM was projected to hit a record $10 billion in net profit for 2014, but analysts have now pegged profits for FY 2014 at $5.54 billion, far below the peak of $9.19 billion set in 2011.

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15 Comments on “Recalls Hammer GM Brand, Q1 2014 Profits...”


  • avatar
    mikey

    Hmmm….not exactly good news for GM employees. Hourly, salary, active, and retired. Though I suppose it could be worse. A prediction of 5.4B for 2014 gives us some promise.

    Todays news will certainly strike joy in the heart, of the GM bashers here.

    Let the hate fest begin.

    • 0 avatar
      davefromcalgary

      mikey, want to borrow my extra flame suit for this comments section?

      • 0 avatar
        mikey

        davefromcalgary….Thanks man, mine is at the dry cleaners. The cleaner can get the soot stains out. It the uninformed, unadulterated B.S that leaves a stain.

    • 0 avatar
      ZoomZoom

      “Todays (sic) news will certainly strike joy in the heart,(sic) of the GM bashers here.”

      Okay, there’s a well-worn tactic. Preemptively accuse people who have a legitimate beef of being bashers in the hopes they’ll shut up and slink away in shame and embarrassment.

      Well, I don’t care anymore. I’ve decided to speak up about what I think was a wrong done to the American people. I suppose you could say that the bailout created me!

      Anyway, until they take this last first Right away from me, I will say what I believe. But with joy? No way. With good nature, maybe. But not with joy.

      When present, past, or retired employees, managers, or cheerleaders in the press try to divert or distract the conversation with sentiments such as yours, it just proves my point that GM ignores genuine problems. Ignores customers. Deflects legitimate complaints. Willfully remains blind to the fact that it’s killing its own brand and itself with these recalls, because this always creates more people like me who will finally swear off this company and its products.

      No, this news does not bring me joy. No way, no how. I see it as an opportunity squandered, potential unfulfilled. It’s a long process of course, but I fear another bailout is in our future. No, not a thing to be joyful about.

  • avatar
    28-Cars-Later

    Five billion here, five billion there, pretty soon we’ll be talking about serious money.

  • avatar
    gtrslngr

    No surprises here what so ever . Well … at least not for those of us with Eyes Wide Open that is . For the GM True Believer Cult/Eyes Wide Shut folks : as well as those in power at GM though I’m sure this came as a complete , total and devastating shock .

    Gee ! I’ll bet T Bejma’s crying in his cereal at this very moment . Along with his minders as well as his allies on a certain other website who’s moniker I shall not mention ;-)

    Careful Bejma . Too much liquid on those generic cheerios makes them a bit too soggy to stomach

    • 0 avatar
      Kyree S. Williams

      “Eyes Wide Open”? gtrslngr, *your* eyes may indeed be wide open, but they’re full of cataracts.

      Please…

    • 0 avatar
      Lie2me

      Hey, gtrslngr, I think there’s some kids out on your front lawn, they’re getting awfully close to that little GLK of yours, better get after them

      • 0 avatar
        dantes_inferno

        >Hey, gtrslngr, I think there’s some kids out on your front lawn, they’re getting awfully close to that little GLK of yours, better get after them

        (With one quick precise motion, gtrslngr suddenly reaches for his trusty master control switch for the in-ground sprinkler system…)

    • 0 avatar

      What’s to cry about?

      “Surging transaction prices on trucks helped General Motors offset heavy costs from safety recalls and eke out a small profit in the first quarter.”

      “GM’s average transaction price in the United States rose by about $2,000, on average, to $32,794 a vehicle in the first quarter. Average U.S. transaction prices for GM’s light trucks rose by about $5,000 to $38,675″

  • avatar
    CJinSD

    Part of GM’s financial trauma this month stems from their involvement in Venezuela? So glad we bailed them out.

    • 0 avatar
      wmba

      Ford lost $350 million in Venezuela 1st qtr this year.

      Toyota shut down production completely in Venezuela.

      It pays to read the news rather than making gratuitously silly remarks about one automaker, when all are affected.

      • 0 avatar
        Lorenzo

        Wait for the other shoe – Argentina – to drop. Venezuela is staggering through the end stages of the charismatic strongman form of government – a system that doesn’t last much longer than the founder, and tends to end violently. Argentina – where to begin? Will they go through IMF bailout #27, or another military takeover, or another charismatic strongman? In both countries, automakers have been, and are, taking big risks.

  • avatar
    ZoomZoom

    These recalls can be death by a thousand cuts; not unlike penalties, which can lose you the game if you’re not careful. And can set officials and fans alike against you in the future. They sure aren’t making me feel all warm and fuzzy, even though I saw a great looking GM car at lunchtime today.


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