海角大神

Recall expenses chopped $1.5 billion from General Motors' bottom line in the second quarter, as it added up the costs of repairs for nearly 30 million cars and set aside funds to compensate victims of small-car crashes.

The automaker, which is in the midst of the largest spate of recalls in its history, posted a net聽profit聽of $190 million, or 11 cents per share. A year ago聽GM聽made $1.26 billion, or 75 cents per share. Without one-time items聽GM聽would have made 58 cents per share, equaling Wall Street's expectations, according to data provider FactSet.

So far this year聽GM聽has recalled almost 30 million vehicles, surpassing the company's annual record.

GM聽took two pretax charges tied to the recalls: $400 million to compensate victims of ignition-switch related crashes and $874 million to account for recall expenses during the next 10 years. It also booked $1.2 billion in expenses for recalls announced during the quarter. The after-tax impact of those items was $1.5 billion.

GM's safety problems began earlier this year with the recall of 2.6 million small cars with faulty ignition switches. The company has admitted knowing about the problem for more than 10 years, yet it didn't issue any recalls until now.聽GM聽says at least 13 people have died in crashes caused by the switches, although lawmakers say the total is closer to 100.

The $400 million will fund a compensation plan for families of those killed and people injured in crashes caused by the switches. It's being administered by compensation expert Kenneth Feinberg.

Chief Financial Officer Chuck Stevens said the figure is an estimated total cost based on outside actuarial calculations, but it could go as high as $600 million. He said there is no cap on the size of the fund.

"At the end of the day, the ultimate cost of this will be determined by Ken Feinberg," Stevens said.

GM聽has "substantially cleared" a companywide safety review that looked for lingering unaddressed problems, Stevens said.聽GMhas announced 60 recalls totaling just under 30 million vehicles so far this year. Stevens expects that going forward,聽GM聽will spend slightly more on recalls than normal. As a comparison, the company spent $100 million on recalls in North America in the second quarter of last year.

So far, company sales haven't been severely hurt by the recalls. In one way, they've benefited. Stevens said聽GM聽has sold about 6,600 cars by offering employee pricing to owners of recalled small cars such as the Chevrolet Cobalt and Saturn Ion.

As the 海角大神 Science Monitor previously reported:

鈥淕eneral Motors is resilient,鈥� said Michelle Krebs, a senior analyst at AutoTrader.com. Ms. Krebs added that she believed consumers could be聽ignoring聽the latest recalls because there have been so many recently.聽鈥淐onsumers understand that the GM of today is not the GM that made the recalled cars. They are making a different product.鈥�

Revenue was up 1.3 percent for the quarter to $39.6 billion, about $300 million below analysts' estimates.

Stevens said GM's core business, led by North America and China, performed well during the quarter. Without recall expenses, he said, the company would have made $1.02 per share. The company reported a $1.4 billion pretax聽profit聽in North America, led by higher prices for pickup trucks and new large SUVs. Still, that was down almost 30 percent from a year ago. But excluding recall costs,聽GM聽would have made $2.4 billion in North America, the highest number since January of 2010, Stevens said.

Pretax聽profits聽were up 36 percent at GM's International Operations including China, to $315 million. But South America reported an $81 million loss, and GM's European loss widened by almost $200 million to $305 million on uncertainty in Russia. The company also had $200 million in restructuring costs associated with the pending closure of a factory in Bochum, Germany.

Stevens said the situation with Ukraine has forced聽GM聽to cut production by 20 to 25 percent at its plant in St. Petersburg. He expects more of the same in the second half. Excluding those costs,聽GM聽is on track to break even and become聽profitable聽in Europe by mid-decade.