Thursday, February 5, 2015

GM Profits Fell 26% in 2014 Due to Recalls


WASHINGTON – General Motors on Wednesday reported net earnings of $2.8 billion in 2014, 26 percent less than the year before, a situation the company ascribed, in part, to the costs of recalls, after obtaining profits amounting to $1.1 billion in the year’s last quarter.

GM, the second-largest vehicle manufacturer in the world, said that the reduction in profits was the result of the $2.8 billion in costs associated with the recalls of more than 30 million vehicles in North America and the $1 billion restructuring of its worldwide operations.

“A strong fourth quarter helped us deliver very good core operating results in 2014 despite significant challenges we and the industry faced,” said GM CEO Mary Barra in a communique.

“By keeping our customers at the center of all our decisions, we addressed those challenges head-on and outlined a customer-focused strategic plan that will guide our company well into the future,” she said.

GM said that its earnings rose slightly by 0.3 percent to $155.9 billion for 2014.

Earnings before interest and taxes came in at $6.5 billion, 24 percent less than for 2013.

The firm, however, said it will increase its dividend by 20 percent to 36 cents per share of common stock in the second quarter.

“Our intention to increase the dividend is consistent with our balanced capital allocation strategy and reflects the confidence we have in the growing strength of our business,” said Barra.

The firm’s goal is “to maximize long-term shareholder value through both stock price appreciation and return of capital,” she added.

In the fourth quarter of 2014, GM’s earnings fell by 2 percent to $39.6 billion.


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