XML 27 R17.htm IDEA: XBRL DOCUMENT v3.23.3
Product Warranties (Notes)
 9 Months Ended
Sep. 30, 2023
Product Warranties Disclosures [Abstract]  
Product Warranty Disclosure [Text Block]
9. PRODUCT WARRANTIES

We record a liability for estimated warranty obligations at the dates our products are sold. These estimates are established using sales volumes and internal and external warranty data where there is no payment history and historical information about the average cost of warranty claims for customers with prior claims. We estimate our costs based on the contractual arrangements with our customers, existing customer warranty terms and internal and external warranty data, which includes a determination of our warranty claims and actions taken to improve product quality and minimize warranty claims. We continuously evaluate these estimates and our customers' administration of their warranty programs. We monitor actual warranty claim data and adjust the liability, as necessary, on a quarterly basis.

The following table provides a reconciliation of changes in the product warranty liability:
 Three Months EndedNine Months Ended
 September 30,September 30,
 2023202220232022
 (in millions)
   
Beginning balance$61.7 $61.9 $54.1 $59.5 
     Accruals16.8 3.4 29.1 11.3 
Payments(3.2)(4.5)(7.5)(8.6)
     Adjustment to prior period accruals(2.7)(7.3)(3.1)(7.9)
     Foreign currency translation(0.4)(0.8)(0.4)(1.6)
Ending balance$72.2 $52.7 $72.2 $52.7 

In the third quarter of 2023, we recorded approximately $13 million of expense related to a field action with one of our largest customers for a die cast component included in transmission assemblies. We will continue to evaluate our obligation and ability to mitigate liability under this field action as new information becomes available and will adjust our estimated liability as necessary. Due to the complexities associated with estimating the range of outcomes related to our liability for this matter, if AAM is not successful in minimizing the liability under this field action, the amount of additional expense is estimated to be up to approximately $15 million.