GM's 2Q profit falls 85 pct. on recall costs

DETROIT (AP) — Recall expenses chopped $1.5 billion from General Motors' bottom line in the second quarter, as it added up the costs of repairs for nearly 30 million cars and set aside funds to compensate victims of small-car crashes.

The nation's biggest automaker posted a net profit of $190 million, or 11 cents per share. A year ago GM made $1.26 billion, or 75 cents per share. Without one-time items GM would have made 58 cents per share, equaling Wall Street's expectations, according to data provider FactSet.

So far this year GM has recalled almost 30 million vehicles, surpassing the company's annual record of 11.8 million in 2004.

GM's safety problems began earlier this year with the recall of 2.6 million small cars with faulty ignition switches. The company knew about the problem for more than 10 years before finally recalling the cars this year. GM says at least 13 people have died in crashes caused by the switches, although lawmakers say the total is closer to 100.

GM set aside $400 million to fund a compensation plan for families of those killed and people injured in crashes caused by the switches. It's being administered by compensation expert Kenneth Feinberg.