(WXYZ) - One of America's strongest companies has stumbled, and the financial and human costs are adding up.
“Their profitability is destroyed for this year”, says John McElroy with Autoline.
General Motors and its CEO Mary Barra laid bare the company’s report on the failed ignition switch recall. Barra calling it brutally tough and troubling.
“We simply didn’t do our job...we must face up to it”, says Barra.
Facing the blame and paying the price. GM, a Forbes top ten profitable company in 2013, is falling fast.
“I think it’s safe to say this is going to be a $4 billion problem for the company”, says McElroy.
Here’s a breakdown of the money lost so far from the recall of 2. 6 million cars
-$1.3 billion charge in GM’s first quarter report
-$ 400 million in the second quarter
-$35 million fine from NHTSA
And the biggest financial penalties are yet to come.
Toyota was fined $1.2 billion by the US Justice Department after they were found to cover up evidence of a failed recall. GM will most likely be hit with the same figure, possibly more.
And as for the pending civil lawsuits, the settlement could cost billions more in compensation to families of those killed by GM cars.
“I'm positive there’s going to be more victims, more than 13 that GM has admitted to. In fact if you read between the lines GM has admitted there are more coming”, says McElroy.
The Center for Automotive Safety, or CAR has estimated the death toll could top 300.