Despite millions of dollars in penalties and fines, and despite the billions of dollars in lawsuit settlements, and the costs of recalls, GM’s bottom line seems unaffected by its ignition switch recall. In fact, GM is experiencing record earnings, beating Wall Street predictions, and compensating its employees with a record amount of bonuses.
GM continues to face costs associated with the repair of over 2.4 million vehicles, as well as the costs associated with countless claims and lawsuits brought against it for damages caused by defective ignition switches. In an attempt to protect its bottom line over 10 years ago, GM did not recall the vehicles that it knew had defective ignition switches. Instead, it appears the company felt that its liability would be minimal in comparison to the cost to fix the defect.
The failure to recall the millions of vehicles affected by the defective ignition switches lead to hundreds and maybe even thousands of car accidents causing hundreds of severe injuries and almost 200 known deaths.
Those ongoing liabilities aside, GM has been doing substantially well, perhaps because there has been a shift in vehicle demand. Consumers are not as interested in purchasing cars as they are in purchasing cross-overs or SUVs. This shift is to the benefit of the car manufacturer because trucks, cross-overs and SUVs result in higher earnings to the company.
For General Motors, full-year revenue was $166.4 billion, up 9 percent from a year ago, beating analysts’ estimates of $163.5 billion. This revenue margin will result in a substantial bonus check for GM’s 52,000 union employees–each can expect to receive an additional $12,000 each. GM’s stock standings have increased just over $6 per share over the last year. GM’s future looks bright if consumers continue their trend of buying the larger vehicles.
GM will continue to face the claims and lawsuits against it for the defective ignition switches. If you or your loved one has sustained significant injury or death in a car accident with a recalled GM vehicle, you can turn to the compassionate San Francisco personal injury attorneys at Alexander Law Group, LLP for help. We are here for our clients and will passionately seek appropriate compensation for you. Contact us today for a free case evaluation.