DETROIT -- Auto suppliers' new contracts with General Motors Co. include a provision that makes suppliers liable for half of GM's warranty costs.
GM introduced the change in mid-April. GM spokesman Dan Flores declined to comment.
Until now, GM has recouped warranty costs from its suppliers on an ad hoc basis. If GM attributes warranty costs to a supplier, GM makes a claim against the supplier, leading to an often-protracted back-and-forth to assign responsibility and decide which one will pay.
William Kohler, co-leader of the automotive industry practice at the Detroit law firm Butzel Long, said: "If GM has designed a way to streamline the process of allocating warranty cost responsibility, God bless them. But in 100 years of automobile manufacturing, automakers and suppliers have not been able to do that."