GM Recalls Will Not Hurt Its Profitability

The Detroit Free Press (1/14, Gardner, 974K) reports that GM CEO Mary Barra told analysts said that the company expects higher profitability in every region during 2015. The article reports that GM CFO Chuck Stevens said that while the company may announce more recalls over the next few years, “the cost per recall should fall, partly because the company can respond faster.” The Free Press reports that the company will spend between $400 million and $600 million on the compensation fund related to the faulty ignition switches, but the exact figures will not be released until later in the year.
Bloomberg (1/15, 2.95M) reports that Barra spoke on the changes the company made to its recall process, saying that the faulty ignition switch defect was ignored because “people had a different view of stalling,” treating it as a “customer satisfaction issue” instead of a safety issue. She noted, “a series of mistakes were made.”