General Motors 2015 Annual Report Download - page 17

Table of Contents

• Differing labor regulations and union relationships;
• Consequences from changes in tax laws; and
• Difficulties in obtaining financing in foreign countries for local operations.



We are significantly affected by governmental regulations that can increase costs related to the production of our vehicles and affect our product portfolio.
Meeting or exceeding many of these regulations is costly and often technologically challenging, especially where standards may not be harmonized across
jurisdictions, a notable challenge with respect to mandated emissions and fuel economy standards. We anticipate that the number and extent of these
regulations, and the related costs and changes to our product lineup, may increase significantly in the future. These government regulatory requirements
could significantly affect our plans for global product development and given the uncertainty surrounding enforcement and regulatory definitions, may
result in substantial costs, including civil or criminal penalties. In addition, an evolving but un-harmonized regulatory framework may limit or dictate the
types of vehicles we sell and where we sell them, which can affect revenue. Refer to the "Environmental and Regulatory Matters" section of Item 1. Business
for a discussion of these regulatory requirements. We also expect that manufacturers will be subject to increased scrutiny from regulators globally as a result
of the well-publicized emissions scandal involving an unrelated automotive manufacturer in 2015. For example, government agencies in several countries
have asked us for information; one of these, the German Ministry of Transportation, is requesting the participation of a number of automotive manufacturers,
including our German subsidiary, in discussions on emissions control issues and has requested a written response from our subsidiary on the subject. This
scrutiny, regulatory changes and increased enforcement may lead to increased testing and re-testing of our vehicles and analysis of their emissions control
systems, which could lead to increased costs, penalties, negative publicity or reputational impact, and recall activity if regulators determine that emission
levels and required regulatory compliance should be based on either a wider spectrum of driving conditions for future testing parameters or stricter or novel
interpretations and consequent enforcement of existing requirements. No assurance can be given that the ultimate outcome of any potential investigations or
increased testing resulting from this scrutiny would not materially and adversely affect us.
We are committed to meeting or exceeding fuel economy and emission control requirements. We expect that to comply with these requirements we will be
required to sell a significant volume of hybrid electric vehicles, as well as implement new technologies for conventional internal combustion engines, all at
increased cost levels. There is no assurance that we will be able to produce and sell vehicles that use such technologies on a profitable basis or that our
customers will purchase such vehicles in the quantities necessary for us to comply with these regulatory programs. Alternative compliance measures may not
be sufficiently available in the marketplace to meet volume driven compliance requirements.
Environmental liabilities for which we may be responsible are not reasonably estimable and could be substantial. Violations of safety or emissions
standards could result in the recall of one or more of our products, negotiated remedial actions, possible fines, restricted product offerings or a combination of
any of those items. Any of these actions could have substantial adverse effects on our operations including facility idling, reduced employment, increased
costs and loss of revenue.
                   

We are subject to legal proceedings involving various issues, including product liability lawsuits, stockholder litigation and governmental investigations,
such as the legal proceedings related to the Ignition Switch Recall. Refer to the "GM North America" section of MD&A for additional information on the
Ignition Switch Recall. Such legal proceedings could in the future result in the imposition of damages, including punitive damages, substantial fines, civil
lawsuits and criminal penalties, interruptions of business, modification of business practices, equitable remedies and other sanctions against us or our
personnel as well as significant legal and other costs. For a further discussion of these matters refer to Note 15 to our consolidated financial statements.
      

On September 17, 2015 we announced that we entered into the DPA with the Office regarding its investigation of the events leading up to certain recalls
announced in February and March 2014 relating to faulty ignition switches. Under the DPA, we
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