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GM To Take $1.3 Billion Charge Linked To Recall

General Motors CEO Mary Barra testifies on Capitol Hill in Washington, last Wednesday.
Pablo Martinez Monsivais
/
AP
General Motors CEO Mary Barra testifies on Capitol Hill in Washington, last Wednesday.

General Motors said on Thursday it will take a charge of $1.3 billion in the first quarter to cover its recall of more than 2 million vehicles, primarily for ignition switch problems.

The announcement comes on the same day that the Detroit automaker said it would need to make additional fixes to the ignition switch mechanism on some of the 2.2 million cars it has already recalled. GM also said it was suspending two engineers with pay in a disciplinary move related to the problem.

The write-off includes a $750 million charge announced earlier. In the last quarter of 2013, GM posted net income of $913 million.

However, the company said it still expects to report "solid core operating performance in the first quarter financial results."

The defect that prompted the recall relates to ignition switches that can shut off the engine, cutting power to air bags, even as the car remains in motion. The new problem cited on Thursday stems from the possibility that owners can remove the ignition key while the cars are running, leading to "a possible roll-away, crash and occupant or pedestrian injuries," GM says.

GM said it was suspending two engineers, whom it declined to name, after an internal investigation of the ignition switch matter.

"This is an interim step as we seek the truth about what happened," GM CEO Mary Barra said in the statement. "It was a difficult decision, but I believe it is best for GM."

Last week, Barra told a Senate committee hearing it was "completely unacceptable" that the design of an ignition switch had been changed, causing problems with the mechanism that have been linked to 13 deaths. She promised to "make changes, both people and process."

Copyright 2021 NPR. To see more, visit https://www.npr.org.

Scott Neuman is a reporter and editor, working mainly on breaking news for NPR's digital and radio platforms.
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