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Recall Costs Cut GM Profit 89%
General Motors Co. earned net income of $100 million in the first quarter of 2014 compared with $900 million a year earlier as recall-related costs erased strong operating results.
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General Motors Co. earned net income of $100 million in the first quarter of 2014 compared with $900 million a year earlier as recall-related costs erased strong operating results.
Revenue rose 1% to $37.4 billion for the period. Wholesale vehicle sales fell nearly 6% to 1.47 million units due to year-on-year declines in volumes everywhere except Europe. Retail sales rose 2% worldwide to 2.4 million units.
GM's earnings before interest and taxes suffered in all four of the company's geographic operating groups. EBIT in North America fell to $557 million from $1.4 billion because of $1.3 billion in charges, mainly for recalls.
In Europe, the company's pretax loss, which includes $200 million for restructuring, expanded to $284 million from $152 million. In South America, pretax losses deepened to $156 million from $38 million. EBIT from GM's international operations plunged 47% to $242 million.
GM Financial posted a pretax profit of $221 million compared with $180 million in the first quarter of 2013.
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