General Motors 2014 Annual Report Download - page 115

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
established a protocol that defines the eligibility requirements to participate in the Program. There is no cap on the amount of
payments that can be made to claimants under the Program.
At December 31, 2014 we have an accrual of $315 million recorded in Corporate which represents our best estimate of remaining
amounts that may be paid under the Program. However, it is reasonably possible that the liability could exceed our recorded amount
by approximately $200 million. The most significant estimates affecting the amount recorded include the number of participants that
have eligible claims related to death and physical injury, which also contemplates the severity of injury, the length of hospital stays
and related compensation amounts and the number of people who actually elect to participate in the Program. Our estimate is subject
to significant uncertainties, as programs of this nature are highly unusual and each eligible claim will have a unique underlying fact
pattern. While we do not anticipate material changes to our current estimate, it is possible that material changes could occur should
actual eligible claims and the related compensation amounts differ from this estimate. The Program accepted claims from August 1,
2014 through January 31, 2015. Payments to eligible claimants began in the fourth quarter 2014 and will continue through the first
half of 2015. Accident victims (or their families) could choose not to participate in the Program and pursue litigation against us. At
January 30, 2015 the Program had received 3,810 claims and the independent program administrator has determined 128 claims to be
eligible for payment under the Program. Remaining claims are either under review, deficient awaiting further documentation or
deemed ineligible. Based on currently available information we believe our accrual at December 31, 2014 is adequate to cover the
estimated costs under the Program. At January 30, 2015 we have paid $93 million to eligible claimants under the Program. Accident
victims that accept a payment under the Program agree to settle all claims against GM related to the accident.
Environmental Liability
Automotive operations, like operations of other companies engaged in similar businesses, are subject to a wide range of
environmental protection laws, including laws regulating air emissions, water discharges, waste management and environmental
remediation. Liabilities have been recorded primarily in Other liabilities for the expected costs to be paid over the periods of
remediation for the applicable sites, which typically range from five to 30 years.
The final outcome of environmental matters cannot be predicted with certainty at this time. Subsequent adjustments to initial
estimates are recorded as necessary based upon additional information obtained. In future periods new laws or regulations, advances
in remediation technologies and additional information about the ultimate remediation methodology to be used could significantly
change our estimates. It is possible that the resolution of one or more environmental matters could exceed the amounts accrued in an
amount that could be material to our financial condition, results of operations and cash flows. At December 31, 2014 we estimate the
remediation losses could range from $110 million to $210 million.
Other Matters
Brazil Excise Tax Incentive
In October 2012 the Brazilian government issued a decree which increased an excise tax rate by 30 percentage points, but also
provided an offsetting tax incentive that requires participating companies to meet certain criteria, such as local investment and fuel
efficiency standards. Participating companies that fail to meet the required criteria are subject to clawback provisions and fines. At
December 31, 2014 we believe it is reasonably assured that the program requirements will be met based on the current business model
and available technologies.
Korea Fuel Economy Certification
We determined the certified fuel economy ratings on our Cruze 1.8L gasoline vehicles sold in Korea were incorrect. We re-tested
and re-certified the Cruze fuel economy ratings which fell below our prior certification and self-reported this issue to local
government authorities. We voluntarily announced a customer compensation program for current and previous Cruze owners and
recorded an insignificant charge in the three months ended December 31, 2014.
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