General Motors 2014 Annual Report Download - page 41

GENERAL MOTORS COMPANY AND SUBSIDIARIES
The following table summarizes the activity for customer satisfaction campaigns, safety recalls, non-compliance recalls and special
coverage in GMNA, including courtesy transportation (dollars in millions):
2014 2013
Balance at January 1 ........................................................................ $ 761 $ 851
Additions ................................................................................. 1,333 115
Payments ................................................................................. (110) (115)
Adjustments to prior periods .................................................................. (19) 11
Balance at March 31 ........................................................................ 1,965 862
Additions ................................................................................. 1,151 128
Payments ................................................................................. (329) (132)
Adjustments to prior periods .................................................................. 691 (8)
Balance at June 30 ......................................................................... 3,478 850
Additions ................................................................................. 163 51
Payments ................................................................................. (637) (130)
Adjustments to prior periods .................................................................. 52 (21)
Balance at September 30 ..................................................................... 3,056 750
Additions ................................................................................. 133 119
Payments ................................................................................. (542) (117)
Adjustments to prior periods .................................................................. 82 9
Balance at December 31 ..................................................................... $ 2,729 $ 761
Adjustments to prior periods in the three months ended June 30, 2014 included: (1) a catch-up adjustment associated with a change
in estimate for previously sold vehicles of $874 million; partially offset by (2) adjustments of approximately $95 million for courtesy
transportation as a result of greater part availability and fewer customers utilizing courtesy transportation than originally estimated;
and (3) approximately $80 million for costs originally estimated separately for ignition switches and ignition lock cylinders that are
now being shipped and repaired at the same time resulting in reduced costs. Based on the per vehicle part and labor cost, number of
vehicles impacted and the expected number of vehicles to be repaired we believe the amounts recorded are adequate to cover the costs
of these recall campaigns.
Adjustments to prior periods in the three months ended September 30, 2014 included an additional catch-up adjustment to our
change in estimate for previously sold vehicles, which was partially offset by a change in estimate on a previously announced specific
recall action due to reduced costs for both parts and labor. On a net basis, recall campaign and courtesy transportation adjustments for
our previously sold vehicles increased approximately $52 million in the three months ended September 30, 2014.
Adjustments to prior periods in the three months ended December 31, 2014 included an additional catch-up adjustment to our
change in estimate for previously sold vehicles. On a net basis, recall campaign and courtesy transportation adjustments for our
previously sold vehicles increased approximately $82 million in the three months ended December 31, 2014.
The Ignition Switch Recall has led to various governmental investigations and inquiries including a subpoena from the U.S.
Attorney for the Southern District of New York, and investigations by Congress, the Securities and Exchange Commission (SEC) and
various state attorneys general. In addition the Ignition Switch Recall and the other recalls described above have resulted in a number
of claims and lawsuits. Refer to Note 17 to our consolidated financial statements for additional information.
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