AUTO INDUSTRY
GM didn’t label faulty switch as safety issue

General Motors failed to designate a flawed ignition switch linked to multiple deaths as a safety concern, chief executive Mary Barra told jurors at a Texas trial.

GM engineers in 2004 and 2005 “misdiagnosed it as a customer satisfaction issue and not a safety issue,” Barra said in a video deposition taken last year and played at trial Monday by attorneys for the plaintiff.

“A series of mistakes were made over a period of time that caused the ignition-switch defect,’’ Barra testified. “This had tragic consequences.’’

Barra’s testimony, from a previously unseen deposition taken for multiple lawsuits, is the CEO’s first to jurors weighing the company’s liability to accident victims allegedly harmed by faulty ignition switches GM knowingly put in cars for years.

GM recalled 2.6 million vehicles with the flawed switches, which, if jostled, can unexpectedly shift into the off position, stalling engines. The defect has been linked to at least 124 deaths and 275 injuries.

The video was shown in a case brought by a Houston family that claims a defective switch caused a fatal car crash in 2011, which resulted in Zachary Stevens, then 19, being charged with manslaughter. That charge was dismissed because the accident involved a recalled car. Stevens is seeking compensation for brain injuries and the cost of defending his criminal case.

When pressed on whether GM intentionally hid a deadly flaw from regulators and customers, Barra said the defect “could cause frontal air bag non-deployment, and certainly if the air bag doesn’t work, it could cause a problem that could cause a fatality.”

— Bloomberg News

EARNINGS
Home Depot’s profit up in second quarter

Home Depot, the world’s largest home-improvement retailer, posted second-quarter profit that rose 9.3 percent and boosted its earnings forecast for the year as Americans continued spending on their houses.

Net income rose to $1.97 a share in the quarter, which ended July 31, the company said Tuesday in a statement. That matched analysts’ average estimate.

The results showed that consumers are still willing to splurge to fix up their homes, spurred by rising home values.

“We are fortunate in that we are in a space where the customer is willing to spend,” Home Depot chief executive Craig Menear said in a conference call with analysts. “That’s clearly being driven by the dynamics that exist in the housing market.”

Home Depot said profit this year will be $6.31 a share, up from its previous forecast of $6.27. The company reaffirmed its projection that sales will rise about 6.3 percent.

Home Depot’s second-quarter sales rose 6.6 percent, to $26.5 billion, in line with analysts’ projections. Sales at Home Depot stores open for more than a year increased 4.7 percent, down from 6.5 percent in the previous quarter.

— Bloomberg News

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