General Motors (GM) managed to secure a small profit this quarter that sent GM stock up, despite a massive recall that could have put the company in danger.
GM’s net income was $125 million, down some 86% from Q1 last year. GM stock is up 3.5% pre-market.
General Motors posted a $125 million gain (6 cents a share) vs. $865 million (58 cents a share) this time last year — after facing down a massive recall.
From the Detroit Free Press:
The automaker has recalled 2.6 million vehicles — small cars mostly from 2003 through 2007 model years — to fix an ignition switch that could flip into accessory mode, cutting off power to airbags. The issue has been blamed for at least 31 accidents and 13 crashes in vehicles that are no longer made, such as the Chevrolet Cobalt and Saturn Ion.
GM spokesman Jim Cain said the automaker is “providing significant assistance” to help automotive supplier Delphi ramp up production of replacement parts. He said Delphi is currently operating one production line on multiple shifts 7 days a week, and the second and third lines are expected to be operational in the summer.
Q1 included $1.3 billion worth of costs faulted to the recall issue.
This is the company’s 17th straight profitable quarter, but worst quarterly performance since 2009.
“The performance of our core operations was very strong this quarter, reflecting the positive response of customers to the new vehicles we are bringing to market,” GM CEO Mary Barra told USA Today. ” Our focus remains on creating the world’s best vehicles with the highest levels of safety, quality and customer service, while aggressively addressing our business opportunities and challenges globally.”