Warranty Week Industry Headlines

Solar Equipment Warranties: While product warranties that last for one or two decades are reassuring to buyers, they're not worth much unless funds are available to pay claims. That means betting on young startup companies eventually becoming old industry veterans. But who knows how reliable a system installed now will be in 10 or 20 years, and how much it will cost to repair or replace?
July 28, 2016

Warranty Adjustments: When a company finds that its actual warranty costs are above or below its predictions, it makes a change of estimate and adds or removes funds from its warranty reserve. While in general, removals are good and additions are bad, some companies seem to be correcting their estimates in every single quarter.
November 5, 2015

GM's & Ford's Warranty Adjustments: Both automakers have recently run into trouble, and have had to add hundreds of millions of dollars to their warranty reserve funds to pay for all the unexpected warranty work. But because it's unexpected, it doesn't show up on charts that track only the "regular" warranty accruals.
November 6, 2014

Warranty Adjustments, Part 1: When a company discovers it has more in its warranty reserve than is needed, it can withdraw the excess funds and add them to profits. Some of these financial adjustments can be huge, and can help dress up an otherwise disappointing financial report.
October 27, 2011

Sports Equipment Warranties: Though the uniforms and hats might be apparel, the equipment used for many team sports and outdoor activities carries product warranties. More importantly, the companies making the gear manage those warranties with accruals and warranty reserve funds, just like any other manufacturer.
August 4, 2011

Warranty Reserves vs. Accruals, Part Two: A handful of computer, electronics and data networking companies have gotten very good at controlling their warranty funds, both in terms of how much they set aside and how much they keep on hand. Others just take their best guess and hope it all turns out well.
June 23, 2011

Telecom Equipment
Warranty Report: The makers of network gear are generally seeing lower warranty costs, though their reserve funds are barely able to cover claims. And there's a new market leader, in terms of both the size of their warranty budget and the way they've been able to steadily reduce costs over time.
May 5, 2011

Aerospace Warranty Report: While the airframe makers and their suppliers pay out roughly the same percentage of product revenue for warranty claims, they keep very different levels of reserves. The airframe makers keep a balance equal to four years of claims, while their suppliers keep half as much in their warranty reserve funds.
April 14, 2011

Automotive Warranties: In terms of warranty accruals, vehicle makers are setting aside less funds in 2008 than they did a year ago, while their suppliers are setting aside more. But before one concludes that supplier recovery efforts are the primary reason, let's allow some time for recent litigation and asset sales to be fully reflected in the numbers.
July 10, 2008

Five-Year Warranty Trends, Part Six: The total balance in all U.S. manufacturers' warranty reserve funds first surpassed $40 billion in 2007. The total is up 4.3% since 2006 and is up 16% since 2003. But while balances in some industry sectors are soaring, in others they're actually shrinking from year to year.
May 8, 2008

New Home Warranties: Pre-fab and mobile homes have much higher warranty costs than site-built homes. But even for site-built homes, there are big differences between the builders in the way they save and spend their warranty funds.
April 24, 2007

Warranty Reserves: While the average manufacturer spends 1.9% of product revenue on warranty claims and keeps a little over a year's worth of funds in reserve, each industry is different. Computer manufacturers and automakers fund their warranty programs at different levels than telecom or aerospace manufacturers. But in any group, as with any trend, there's always the odd man out.
April 6, 2004

The Warranty Week 500 Most of the major players in warranty claims management recently reported details about their warranty reserve funds, claims and accruals during the second quarter. Here are the summary results.
September 8, 2003

GM's Warranty Reserves: Both GM and Ford made sizeable withdrawals from their reserve funds during the second quarter. GM cited increased product quality. But analysts said the move lowered earnings quality. Ford said nothing, and nothing was said. What's behind the changes of estimate?
August 18, 2003