General Motors Company increases recall charge to $1.3 billion
General Motors Company (NYSE:GM) has announced that it is expecting to take a $1.3 billion charge in the first quarter related to the ignition-switch recall. The recall addresses an issue where some drivers’ keys could fall out of the ignitions while the car is on.
The charge amount increases GM’s estimate from March 31st of $750 million by over 70%. GM is replacing the ignition switches on 2.6 million Chevrolet Cobalts, Pontiac G5s, Saturn Ions, and several other small cars.
“GM is aware of several hundred complaints of keys coming out of ignitions. Searches of GM and government databases found one rollaway in a parking lot that resulted in a crash and one injury claim. The same searches turned up no fatalities,” said the company in a statement.
The $1.3 billion charge includes vehicle repairs and loaner vehicles that are provided to customers that request them. The charges will affect GM’s first quarter earnings, which will be reported on April 24th.