GM profits drop drastically, economist says any profit is still a 'good sign'
Thu, 24 Apr 2014 22:34:09 GMT —
The cost of recalling nearly 7 million cars and trucks sank General Motors' first-quarter profit, but the company's CEO said the much-publicized recalls have yet to cut into sales.
GM on Thursday reported its worst financial results in more than four years, with profit falling 86 percent to $125 million.
Despite the drop in profits local economists say it's actually a good sign for the Michigan automaker.
"In many ways the report is good news," said Tim Nash, Northwood University.
What's plagued the company most this year is the recalling of 2.6 million cars for possible faulty ignition switches. It's a recall blamed on 13 deaths.
"It's upsetting to hear but when you see the results that are going on with General Motors taking care of all these vehicles, that's who I want to be with," said Jim Simms, Simms Chevrolet.
Despite it all, there are still people excited to buy GM.
"It keeps us employed," said Nicholas Boggs, GM Customer.
Boggs is buying a new Chevy Traverse.
"I look past the issue. I mean every major company has a big issue like that, and this just happens to be the hot topic right now," said Boggs.
Economy expert Tim Nash says GM can come out of 2014 posting strong sales.
"It has to just stand up and say we have a problem here, we have made a mistake, we are responsible for it, and we're going to make certain it doesn't happen again," said Tim Nash, Northwood University.