How Much Will a Recall Scandal and Old Saturns Slow GM?


Stock, Kyle [2014], “How Much Will a Recall Scandal and Old Saturns Slow GM?”, Business Week, New York, 18 de marzo,

Business Week
Fecha de publicación: 
Martes, Marzo 18, 2014
Idea principal: 

First there were the lawsuits, and then General Motors issued its controversial recall, followed by a Justice Department probe and a further round of recalls yesterday. Next up: congressional hearings and, no doubt, more lawsuits. The protracted crisis and alleged mechanical coverup has caught up to GM (GM) just as the automaker found a nice bit of momentum. The question among GM investors and car buffs alike is how much the recall wreckage will slow the company down. The answer, in terms of finances, appears to be: not much. The company said it will take a $300 million charge this quarter to cover recall costs -- the expenses associated with rewiring and reconfiguring some 2.1 million vehicle. GM shares slid by roughly 11% as the crisis deepened in recent days, though the stock regained some ground on Monday, when the company posted a video message by CEO Mary Barra acknowledging missteps.