In today’s General Motors digest: The automaker takes it on the chin in its quarterly report; the analysts have their say; GM Korea could allow its workers to build the next Cruze if only they would put down the picket signs; 45 attorney generals are investigating the February 2014 recall; and CEO Mary Barra will be the keynote speaker for a connected-vehicle forum.
Autoblog reports GM made a net income of $200 million for Q2 2014, in comparison to $1.2 billion during Q2 2013. Speaking of $1.2 billion, that was how much the automaker paid in recall-related repairs this quarter, with a $900 million charge ready for future recall campaigns. Finally, $400 million has been set aside for the Feinberg compensation plan, though $200 million may be added down the road.
Meanwhile, Automotive News collected a number of analyst quotes regarding the poor Q2 2014 showing, including KBB.com’s Jack Nerad proclaiming that while the automaker may be handling recalls better these days, “it is paying for past sins in terms of the bottom line.” Michael Krebs of AutoTrader.com adds that GM “would have had an outstanding quarter” were it not for the ongoing recall parade, and both Brian Johnson of Barclays Capital (but not of AC/DC) and Morningstar’s David Whiston believing brighter days ahead in Europe and outstanding success in China.
Speaking of the Asia-Pacific, GM Korea management informed the employee’s union that if the latter calls off its impending strike over stalled wage negotiations, the next-gen Chevrolet Cruze would be built in its Gunsan facility. The factory — where the Orlando and current-gen Cruze are assembled — is one of four under GM Korea, and boasts a production capacity of 260,000 units per year.
Back at home, The Detroit News reports GM is under investigation by 45 attorney generals over the February 2014 ignition switch recall, as well as auto safety agency Transport Canada. On the federal level, CEO Mary Barra stated she hasn’t met with the prosecutors or the grand jury regarding the U.S. Attorney’s Office and the Securities and Exchange Commission investigations into wire and bankruptcy fraud related to the automaker’s 2009 bankruptcy proceedings.
Finally, Barra will be the keynote speaker at the 21st World Congress on Intelligent Transport Systems in Detroit September 7. The event, focused on connected vehicles, will attract 10,000 guests from 65 countries to share and discuss ideas, challenges and strategies regarding the burgeoning scene. Barra’s keynote will focus on the future of intelligent transportation.