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General Motors’ earnings plummet amid mass recalls

DPA Washington | Updated on March 12, 2018 Published on July 25, 2014

Car maker to pay millions as compensation

General Motors earnings has plummetted amid mass recalls related to the faulty ignition switches and other issues, the automaker said on Thursday.

GM faces more than $400 million in compensation to victims of the faulty ignition switches.

The figure could rise as high $600 million, after ignoring for a decade the defect in 2.6 million cars. The automaker has tied 13 deaths to the issue, a figure which could rise.

Chief executive Mary Barra has responded with a systematic search for defects in GM vehicles. The Detroit-based automaker has issued 60 recalls for some 29 million vehicles this year.

The costs of repairs and damages to victims weighed heavily on GM’s second quarter earnings, which fell to $190 million from $1.2 billion in the year-earlier period.

Revenues rose slightly to $39.6 billion as sales in the US market of Chevrolet, Buick, Cadillac and GMC vehicles remained strong.

Rival automaker Ford reported a 6-per-cent increase in net income to $1.3 billion. Revenue dipped slightly to $37.4 billion.

Published on July 25, 2014
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