Gm Motors

In: Business and Management

Submitted By zeeshanshivani
Words 765
Pages 4
Zeeshan Shivani
Prof. Constable
Managerial Accounting
April 27th, 2014
General Motors Recall
General Motors Company is an American multinational corporation that designs vehicles and it parts. The Company was founded in 1908, it is based in Detroit, Michigan. It produces vehicle in 37 countries under brand name like Chevrolet, Buick, GMC , Cadillac , Alpheon, Jiefang, Baojun, and Wuling . The company also provides safety and security solutions concerning vehicles. It also provides aumotive financing services and lease products through its dealerships.
Cars produced by GM motors after 2004 had defective ignition switch due to which they had to call around 7 million cars in the first quater. According to the US securities regulators the company knew about the this manufacturing default, they delayed in recalling the vehicles due to which there have been about 13 deaths. The engineers knew about this problem a decade ago, around 2.6 million cars have faulty ignition switches. The CEO Mary Barra of GM motors the cost of repairing these vehicles is going to be around $1.3 billion. Cost of repair it going to be around $700 million and cost of recall is going to be around $600 million. The cost of recall had a great impact on the company’s first quarter report, they reported about a $108 million of profits. The company still manged to remain focused on its business despite the recalls. Their shares did showed a drop of 17 percent and it profit dropped about 85 percent. The customers have lost confidence in the vehicles produced by GM motors. As of right now GM motors is facing 60 class action lawsuits in United States of America and Canada and it is also facing lawsuit from its shareholders that it failed to monitor and disclose the ignition problem. Second recall was delayed but General Motors as well, their manufactured cars from 2004 to 2007 had problems…...

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