The repair bill for General Motors’ massive recall keeps rising.
The company has now raised the damage estimate for the current quarter from $750 million to $1.3 billion. Most of that money is going to be spent on fixing the cars and lending out loaner vehicles, with more financial damage sure to come later. Hiring disaster-settlement specialist Kenneth Feinberg could not have been cheap—and whatever kind of payments he lines up for victims of the faulty ignition switches won’t be cheap, either.
But right now, $1.3 billion is the only tangible figure out of the automaker’s mess. Here’s a sense of what $1.3 billion represents to a company the size of GM (GM):
• 1.25 times fourth-quarter profit
• 90 times GM Chief Executive Mary Barra’s 2014 compensation
• 3,250 times the estimated cost of fixing the problem in 2005
• 24,514 Cadillac CTS sedans, by true market value as quantified by Bloomberg data
• 39,936 Chevrolet Silverado pickups
• 91,782 Chevrolet Spark compacts, GM’s cheapest car
• 39.7 million GM shares, as of this morning.
In short, the crisis is no longer just embarrassing—it’s expensive. Wall Street, however, remains relatively unfazed. Of the 21 or so analysts following GM, only four have a “hold” rating on the stock, and only one is advising investors to “sell.”