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Recalls Depress GM's Second Quarter Earnings
DETROIT -- General Motors Co. reported net income of nearly $200 million during the second quarter of 2014, compared to the $1.2 billion the automaker earned during the same period in 2013.
Earnings were affected by $1.2 billion in recall-related costs and charges associated with a victims' compensation program initiated last month, the company said.
GM assumed a special charge of $400 million toward its switch compensation program, but qualified that the program could rise to $600 million.
Earlier this month, GM unveiled a victims' compensation fund for those killed or injured by a defective ignition switch in several of its vehicle models that has been linked to 13 deaths.
GM reported total net income of $190 million, or 11 cents per share, during the quarter.
Net revenue for the quarter stood at $39.6 billion, up from $39.1 billion during the same period in 2013, the company said.
GM North America reported earnings before taxes and interest, or EBIT, of $1.4 billion, which includes the impact of $1 billion in recall-related costs. GM Europe reported and EBIT-adjusted loss of $300 million, while GM South America reported an EBIT loss of $100 million, the company reported.
SOURCE: General Motors Co.
Published by The Business Journal, Youngstown, Ohio.
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