After Major GM Recall, Company Announces Profit Loss

The latest General Motors recall has been stirring the debate regarding the importance of making sure that the automaker has a dedicated auto safety team focused entirely on making sure that vehicles are designed to be safe and reliable.

According to the latest reports, GM announced that the recall will be costing the company about $1.3 billion. The estimates is only valid for the first three months of 2014. The firm reported that, in comparison to the previous year, GM saw an 86 percent drop in profits during the first trimester, which is very likely the result of the backlash of the company’s latest recall.

The ignition-related recall that GM issued not too long ago affected over 2.6 million vehicles in the United States. According to the official reports, at least 13 people were killed in accidents related to the recalled vehicles. The first accident related to the ignition issue was first reported in 2004. According to safety advocacy agents, the company failed to address the issue once the first reports started to come in. Safety advocates also point out to the fact that the National Highway Traffic Safety Administration never identified an issue as well, even when similar accidents were reported to the agency in the period between 2004 and 2014.

At this moment, congress is investigating the GM recall in order to identify the reasons behind the slow response.

The company has had a hard time convincing the public that it is working on developing better and safer vehicles, which is causing the company to lose its presence in the market amid a flurry of GM ignition switch lawsuits. Whether you’re a GM car driver or not, you should remember that this recall and the many accidents associated with the defective vehicles serve as an example of the importance of responding to recalls right away. Too often, people are severely and even deadly injured in car crashes linked to equipment failures before a recall campaign is launched.

This latest trimester’s loss of profits is just as bad as the company’s last bad year, 2009.

Experts say that if the company does not step up and demonstrate to consumers and other members of the industry that they can develop safer and reliable vehicles, they may not regain the public’s trust in the future, rendering their efforts useless.

Hopefully, no other incident linked to this particular recall will be reported. Consumers with the recalled vehicles in their possession should contact GM if they haven’t been contacted yet. For more on this particular story, follow this link.

Comments are closed.