Why We Shouldn’t Forgive GM


(Photo by Mark Wilson/Getty Images)

(Photo by Mark Wilson/Getty Images)

General Motors (NYSE:GM) was able to restructure and rebuild following bankruptcy in 2009, and make a comeback as one of the country’s premier automakers. That has all since unraveled, as the company has rolled out recall after recall involving millions of defective vehicles, many of which ended up killing drivers and passengers due to manufacturer error. The most incredible thing through all of this is that GM has really yet to see the fallout from any of it. The company’s sales numbers have been maintained, and even outpaced some of their competitors.

How can that be? Are consumers truly that ignorant, or are their memories just short? Either way, the fact that General Motors is selling any vehicles at all at this point is fairly impressive.

Just how bad have the recalls been? As ABC News has added up, the recent addition of 8.2 million more recalled vehicles brings the total for the year up to 29 million. That’s the single largest number ever in one year by a single manufacturer. It’s also more cars than the company has sold over the past six years. The company has spent more than $2.5 billion in fixing safety problems so far, but there is also a new compensation fund for crash victims that will need to be taken into account, and likely an onslaught of law suits and more repair costs.

Karl Brauer, a senior analyst for Kelley Blue Book, tells ABC News that the nearly impossible feat of experiencing so many issues without having it take a negative toll on the company as a whole is set to end. “So far, these recalls haven’t impacted current sales and have had minimal impact on consumer perception, but we’re hitting unprecedented numbers and it’s reasonable for people to start asking, when and where will it end?” he said.

So far, it hasn’t happen yet. The New York Times reports that GM’s sales in June rose 1 percent, selling 267,461 vehicles.