General Motors 2015 Annual Report Download - page 93

Table of Contents
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With respect to product liability claims, other than claims relating to the ignition switch recalls discussed above, involving our and General Motors
Corporation products, we believe that any judgment against us for actual damages will be adequately covered by our recorded accruals and, where
applicable, excess liability insurance coverage. In addition we indemnify dealers for certain product liability related claims including products sold by
General Motors Corporation's dealers. Liabilities have been recorded in Accrued liabilities and Other liabilities for the expected cost of all known product
liability claims plus an estimate of the expected cost for product liability claims that have already been incurred and are expected to be filed in the future for
which we are self-insured. In light of vehicle recalls in recent years it is reasonably possible that our accruals for product liability claims may increase in
future periods in material amounts, although we cannot estimate a reasonable range of incremental loss based on currently available information.
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In the three months ended June 30, 2014 we created a compensation program (the Program) for accident victims who died or suffered physical injury (or for
their families) as a result of a faulty ignition switch related to the 2.6 million vehicles recalled in the three months ended March 31, 2014. The Program is
being administered by an independent program administrator, who established a protocol that defined the eligibility requirements to participate in the
Program. The Program accepted claims from August 1, 2014 through January 31, 2015 and received a total of 4,343 claims. The Program completed its claims
review process in the three months ended September 30, 2015 and the independent program administrator determined that 399 claims were eligible for
payment under the Program. Payments to eligible claimants began in the three months ended December 31, 2014 and will continue through the first quarter
of 2016. At January 29, 2016 we had paid 345 eligible claimants $554 million out of the 362 claimants who accepted offers under the Program. The other 37
accident victims (or their families) chose not to participate in the Program and could pursue litigation against us. Accident victims (or their families) that
accept a payment under the Program agree to settle all claims against GM related to the accident.
We recorded a charge of $400 million in the year ended December 31, 2014 and based on the Program's claims experience we recorded an additional $195
million in the year ended December 31, 2015. These charges were recorded in Automotive selling, general and administrative expense in Corporate and were
treated as adjustments for EBIT-adjusted reporting purposes. Based on currently available information we believe our accrual at December 31, 2015 is
adequate to cover the estimated costs under the Program. The following table summarizes the activity for the Program since its inception (dollars in millions):
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Balance at April 1, 2014 $ —
Provisions 400
Payments (85)
Balance at December 31, 2014 315
Provisions 195
Payments (444)
Balance at December 31, 2015 $ 66
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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, 2015 we estimate the remediation losses could range from $100 million to $210 million.
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