General Motors 2014 Annual Report Download - page 31

GENERAL MOTORS COMPANY AND SUBSIDIARIES
occur if 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 has 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.
We analyze the results of our automotive business through our four geographically-based segments:
GMNA
Automotive industry volume has continued to grow in North America. In 2014 U.S. industry light vehicle sales for the calendar
year were 16.5 million units, up from 15.6 million units in 2013. In January 2015 we announced that we expect 2015 industry light
vehicle sales to be between 16.5 and 17.0 million units.
In the year ended December 31, 2014 our U.S. retail vehicle sales increased at a rate approximately 0.7 percentage points less than
industry sales. As a result, our U.S. market share decreased by 0.1 percentage points. U.S. market share for both Chevrolet and
Cadillac decreased, while GMC and Buick increased.
GMNA continued to generate increases in average transaction prices (ATP) in U.S. According to J.D. Power PIN estimates, in the
year ended December 31, 2014 we achieved record ATP in the U.S. on the strength of new products such as large pick-ups and SUVs.
Contributing to the record ATP, our U.S. incentive spending as a percentage of ATP increased by 0.1 percentage points, while
industry spending increased by 0.4 percentage points compared to the prior year.
The first deliveries of the new 2015 Chevrolet Colorado and GMC Canyon mid-size pick-ups occurred in September 2014. We
have announced plans to add a third shift at our Wentzville, Mo. assembly plant in early 2015 to meet expected demand for both mid-
size pick-ups and full-size vans.
Customer safety and satisfaction were the major reasons for the recall of approximately 36 million vehicles announced during 2014.
These recalls included: (1) approximately 2.6 million vehicles to repair ignition switches that could result in a loss of electrical power
under certain circumstances that may prevent front airbags from deploying in the event of a crash (accident victims who died or
suffered physical injury associated with these vehicles (or their families) may be eligible to participate in a compensation program, as
more fully described in Note 17 to our consolidated financial statements) and to fix ignition lock cylinders that could allow removal of
the ignition key while the engine is running, leading to possible rollaway or crash; (2) approximately 1.9 million vehicles to replace
either the power steering motor, the steering column, the power steering motor control unit or a combination of the steering column
and the power steering motor control unit as the electric power steering could fail under certain circumstances; (3) approximately
1.3 million vehicles prone to non-deployment of the side impact restraints if vehicles are not serviced when the Service Air Bag
warning light is illuminated; (4) approximately 2.7 million vehicles to modify the brake lamp wiring harness that could have corrosion
develop due to micro-vibration; (5) approximately 1.5 million vehicles to replace front safety lap belt cables that could fatigue and
separate over time; (6) approximately 1.4 million vehicles to replace the shift cable that could wear out over time resulting in
mismatches of the gear position indicated by the shift lever; (7) approximately 12.1 million vehicles to rework or replace ignition keys
because the ignition switch may move out of the “run” position which may impact power steering and power braking and, depending
on timing of the key movement relative to the activation of the sensing algorithm of a crash event, may result in airbags not
deploying; (8) approximately 1.1 million vehicles to repair a loose battery cable that could impact vehicle warning systems;
(9) approximately 0.7 million vehicles to repair ignition mechanisms where the ignition key could be pulled out while the vehicle is in
the run position; (10) approximately 0.6 million vehicles to replace the wave plate in all vehicles with 6T70 and 6T75 transmissions
which could crack under certain circumstances; and (11) approximately 10.1 million vehicles for other matters. In the three and six
months ended June 30, 2014 we recorded charges of approximately $1.1 billion and $2.4 billion primarily for the estimated costs of
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