The No. 1 US automaker is having a truly bad year – has recalled a record number of cars, it’s facing intense scrutiny from federal regulators, a criminal probe for one of them, lawsuits worth billions and a natural rise in the costs associated with repairs.
According to the company, the recall and related car-loan expenses have grown 8% this year to $2.7 billion for the first nine months of the year, as the automaker has practically recalled for one or more issues all of its models currently in production (and many more that are older).
Through September 30, General Motors has shelled $680 million to replace the defective ignition switches of 2.6 million cars and another $325 million to repair or replace ignition keys for another 12.1 million vehicles. During the nine-month period, the company issued recalls for 34 million units and has already taken the charges for 32 million of them.
The US carmaker is already facing more than 150 lawsuits in recall-related class actions and details about two record group actions in New York have emerged in recent weeks – the disgruntled customers are asking a Manhattan federal court to coerce GM to pay $10 billion for dropped car prices and other issues the complaints claim to have been caused by the recalls.