General Motors’ quarterly earnings report on Thursday was noteworthy mostly for what it lacked: another big financial charge for safety recalls.
After running up special charges of nearly $3 billion in the first half of the year for safety problems, G.M., the nation’s biggest automaker, avoided additional charges for recalls in the third quarter.
While G.M. did incur $700 million in costs for fixing recalled vehicles during the quarter, the company had already booked those charges in previous periods….
By accounting for the bulk of its recall costs in the first half of the year, G.M. has turned a corner — at least financially — in its struggle to move beyond the worst safety crisis in its history.
So let me make sure I understand this: GM is still blowing trainloads of cash fixing its mistakes, but they decided to declare that the money they’re spending now was actually spent earlier in the year, so that their official profit in the first half is below the real figure, and their official profit for the third quarter is above the real figure, and then they get a sunny headline in the New York Times saying they “doubled their profit?”
My grandfather the CPA would not approve.