A massive recall of 2.2 million cars, connected to 13 deaths, will cost General Motors $US1.3 billion in the first quarter of 2014, the automaker announced today.
Most of the money will be used to pay for repairs and related courtesy transportation.
The recall includes seven GM models made between 2003 and 2011, which may have faulty ignition switches that can flip out of the “run” position while the car is moving, turning off the engine, cutting some electric power, and disabling the airbags.
GM said today it has informed the National Highway Traffic Safety Administration that it will add ignition lock cylinders to its recall of the 2.2 million older model cars.
Meanwhile, it’s still unclear why the automaker took so long to acknowledge and address the problem continue. CEO Mary Barra says GM has placed two engineers on paid leave, “an interim step” in its own investigation into the botched recall.
On Tuesday, the government announced a $US28,000 civil penalty against GM for failing to respond fully to a request for information related to the recall before the set deadline. It will continue to fine GM $US7,000 per day until the automaker fully answers all the questions asked.
Despite the recall charge, GM “expects to report solid core operating performance in the first quarter financial results,” it said in a statement.
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