2014 will forever be remembered by GM as the year of recalls, and for good reason. The auto giant conducted 80-plus recall campaigns, which carved out $3.5 billion of company profits.
Interestingly enough, 2014 was also a good year for GM. The company sold 9.9 million vehicles around the world, which is the most it has ever recorded in a single year. Even with the massive recalls, the automaker posted a $2.8 billion net profit. As anyone can clearly see, that still pales in comparison to the cost of the recalls. GM is still facing an estimated $315 million in settlements for the famous ignition switch problem. So far 51 fatalities have been connected to the faulty switches, which have cost the organization $93 million.
The other good piece of news from GM is that the hit from the recalls is not going to take money out of the pockets of the assembly line workers. Automotive News reports that instead of hourly employee bonuses being affected, executive bonuses were slashed for 2014.
Many thought that the huge wave of recalls from the early months in 2014 would leave GM in shambles. They asserted that Mary Barra was installed as CEO to take the fall for years of sloppiness, because she obviously was a soft choice. With 2015 now upon us, it’s become obvious that Barra not only kept the ship from sinking, she saw it through to calmer waters. GM isn’t completely out of the woods yet, but it has navigated the worst of it while at the same time convincing consumers in the United States and abroad that the “New GM” is a different beast than the old one.
The Department of Justice and 49 out of 50 states are still investigating GM, but so far not much has come of it. It’s almost like GM has become a feline with nine lives. It is making moves that are setting up great long-term success, thanks in part to incredibly strong sales of vehicles like the all-new 2015 Cadillac Escalade.