After filing for bankruptcy five years ago, General Motors is now one of the most profitable companies in the world.
GM has earned a stunning $22.6 billion since the dark days of the financial crisis, when the automaker was bailed out by the U.S. government. Taxpayers didn't fare nearly as well. They'd lost $10.6 billion by the time the U.S. Treasury department closed the books on the $49.5 billion bailout in December.
Make that We Lost $ 11.2 biillion. Taxpayer losses on GM bailout higher than first reported
Taxpayers lost $11.2 billion on the GM bailout, up from $10.3 billion the Treasury Department estimated when it sold its last GM shares on Dec. 9. A Treasury Department auditor said the government had written off an $826-million “administrative claim” tied to the GM bailout on March 20.
Goodness knows what the “administrative claim” consists of, but it was worth just south of a billion dollars. And if I had to bet, I’d probably bet this isn’t the last write-off.
GM has issued more recalls this year than ever before. There have been 29 separate recalls covering 13.8 million U.S. cars and trucks, and 15.8 million vehicles worldwide.
So far GM has agreed to pay the maximum fine of $35 million to the National Highway Traffic Safety Administration for the delay in the ignition recall. And it will be subject to closer oversight by the regulator.
General Motors says it needs to change or replace the keys for about 3.4 million cars because they could cause the ignition switch to move out of position if they are carrying too much weight. In a statement released Monday, GM said that the switches can rotate out of 'run' if the key has excess weight and the car 'experiences some jarring event', such as hitting a pothole or crossing a railroad track.Posted by Jill Fallon at June 17, 2014 9:56 AM | Permalink
That can shut off the engines and disable power steering, causing drivers to lose control. Also, the air bags won't work. The recall affects seven cars with model years ranging from 2000 to 2014.
GM is already recalling 2.6 million older small cars, mostly in the U.S., for a similar problem where the ignition switch slips out of 'run' and causes an engine stall. In that case, the problem is with the mechanics of the switch. In this latest recall, GM says the problem is with the design of the key. GM began reviewing ignition switches across its line-up after initiating the earlier recall. GM links that switch problem to 13 deaths.
The ignition switches can unexpectedly slip from the 'run' to 'accessory' position, shutting off the engine. That shuts off the power steering and power brakes, making cars harder to control. It also disables the air bags, which won't inflate in a crash. GM said that this problem had caused at least 54 crashes and 13 deaths, but trial lawyers suing GM say the death toll is more than 60.
GM has acknowledged knowing about the problem for more than a decade, yet the cars weren't recalled until this year. Its chief executive, Mary Barra, will testify in front of a House subcommittee about the matter for a second time on Wednesday.