This article was last updated on April 16, 2022
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In its first-quarter report, General Motors Co. has announced on Thursday to have had its profit toppled by 88 per cent largely due to the massive recall prompted by discovery of defective ignition switches. However, the company claimed to have had otherwise observed better results that surpassed expectations on strong pricing for its redesigned pickup trucks in North America and improvement overseas.
According to the company, its core operating outlook remained on target for the year, which has largely relived investors who have bid up the stock by 3 per cent. Citi analyst, Itay Michaeli, stated that “it should be good enough to ease concerns” and that “expectations were very low. People were just kind of nervous overall about how the quarter would look. The story really here though, in terms of fundamentals, is better performance in the international regions.” The quarter report included a previously expected charge of $1.3-billion due to the recall.
The company’s Chief Financial Officer, Chuck Stevens, alleged that it is too early to predict whether GM would take more charges. Additionally, he stated that the company is still studying its options for the victims of the faulty switches, which have been linked to at least 13 deaths. However, safety advocates and lawmakers are pressing for GM to establish a victims’ compensation fund. Stevens mentioned that “obviously, the recall campaign charges in the first quarter overshadows the headline results, but if you look underneath that, we had strong performance across the board.”
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