Archived Copies of Warranty Week

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December 2002 to Today

Supplier Recovery Estimates: While automotive parts suppliers pay roughly 10% of the industry's warranty expenses now, their "fair share" could be as high as 37%. But there's no way to get them to pay that much, so supplier recovery efforts are stuck in a contentious standoff between the OEMs and their suppliers.

Automotive Supplier Warranty Report: For years, powertrain suppliers and other parts suppliers have more or less split the industry's warranty expenses 50/50. But in recent years, the powertrain segment's share has risen fast, thanks to emissions compliance trouble in California for some Cummins diesel engines.

Aerospace Warranty Report: Claims and accruals continue to fall for the top aerospace OEMs, though the warranty expense rates of aerospace suppliers has been rising for two years now. And the recent acquisition of Rockwell Collins by United Technologies has made the industry's largest warranty provider even bigger.

Building Materials Warranty Report: Warranty costs are generally rising in recent years among the suppliers of building materials, fixtures, and furniture. The latter group has seen the most noticeable cost increase, though expense rates across the industry are still generally on the low side (below one percent of revenue).

Computer Industry Warranty Report: The warranty costs of the top U.S.-based computer manufacturers are declining, but not at the expense of their suppliers. Instead, their costs seem to be declining together in parallel, with their expense rates now roughly half as high as they were 15 years ago.

Aerospace Warranty Report: Unlike the automotive industry, the manufacturers of commercial airplanes do not have higher warranty expenses than their suppliers, and do not spend a larger percentage of their sales revenue on warranty claims. But just like those land-based vehicle makers, airplane and helicopter manufacturers have been cutting their warranty costs for more than a decade.

Automotive Supplier Recovery: While the OEMs are enjoying lower warranty expense rates, it's not all good news for their suppliers. While some of the cost reduction comes from OEMs manufacturing better products, some could be the result of increased reimbursements by suppliers. A few of the relevant warranty metrics hit new records in 2017, suggesting increasingly successful supplier recovery efforts.

Fifteenth Annual Product Warranty Report: All the metrics are down this year, including product sales. Some companies continue to cut their warranty expenses by huge amounts, producing better products with lower failure rates. But others are getting better at shifting more of their warranty expenses back onto their suppliers.

Midyear Auto Warranty Expense Report: Though passenger car sales have slowed a bit from last year's record pace, there's no sign of a slowdown among truck makers or their suppliers. More worrisome is a slow but steady rise in warranty expenses that's been under way for several years, after more than a decade of gradual cost reduction.

October 26, 2017

Automotive Supplier Recoveries: A decade ago, the largest OEMs devised new warranty policies that helped to shift more of their expenses back to their suppliers. But then in 2014, an increasing number of safety recalls raised their warranty cost back up, leaving both them and their suppliers at higher expense levels.

Building Trades Warranty Report: Unlike most other industries, in the new home construction business, the builders have lower warranty expense rates than many of their suppliers. But the makers of appliances and heating/cooling systems are now cutting their costs and narrowing the gap between their expense rates and those of the makers of fixtures, furniture, and building materials.

Electronics Warranty Report: Although not as pronounced as in the automotive industry, and not as unseen as in the aerospace industry, there is definitely a gap in the high-tech sector between the warranty expense rates of OEMs and their suppliers. Makers of computers, telecom equipment, and medical devices have much higher warranty costs than disk drive or semiconductor manufacturers.

Aerospace Warranty Expense Report: Because one major airframe manufacturer has now separated its warranty and extended warranty accounts, the aerospace industry totals and averages are in disarray. However, many OEMs and suppliers continue to cut their warranty costs, setting new record lows for their expense rates.

Automotive Warranty Expense Report: While the individual manufacturers see their claims, accrual, and sales totals change up and down from year to year, some long-term trends are also evident. The carmakers are cutting costs the most and the longest, while the powertrain manufacturers are falling behind other types of suppliers.

Automotive Supplier Recovery: Factors such as recessions and recalls seem to have as much influence as efforts by OEMs to recover larger reimbursements from their suppliers for warranty expenses. But no matter which factor contributes the most, the ratio between their parts of the total still seems to range between 80% and 90%.

August 25, 2016

New Home & Building Materials Warranty Report: The name of the game is stability. Some of the builders and their suppliers have gotten very good at accurately predicting their future warranty costs and keeping them stable. Others let them rise and fall without much of a thought about warranty management. And it's easy to see the difference relatively quickly in a chart.

Semiconductor & PC Board Warranty Report: For most of the companies making microchips and printed circuit boards, sales are up and warranty expenses are down. But expenses have fallen far more dramatically for the suppliers of the chip manufacturing equipment, who used to spend a far higher share of their revenue on claims than their customers did.

Aerospace Warranty Report: Unlike the computer and automotive industries, the aerospace OEMs do not pay a vastly greater share of industry warranty expenses than do their suppliers. However, like their parts and component suppliers, they tend to provide longer warranties and keep larger reserve balances than manufacturers in other industries.

Auto Parts Supplier Warranty Report: Suppliers of engines and transmissions keep larger warranty reserve balances and pay higher warranty expense rates than do suppliers of other automotive components. But those other suppliers have done a better job of cutting their warranty expenses over the past decade, though they've lost ground recently.

Auto Parts Supplier Warranty Report: Compared to the automotive OEMs, the suppliers have kept their warranty costs low and ytheir expense rates stable. And while some saw costs drift upwards last year, on average the group remained about the same, as they have for the last few years.

Aerospace Warranty Report: Because a few big manufacturers dominate the industry, their problems or successes with warranty cost control can change the industry averages significantly. But over the long term, the trend is clear: aerospace suppliers have learned how to cut their warranty expenses and keep them low. The OEMs? Not so much.

Auto Parts Supplier Warranties: Of course the drivetrain component manufacturers pay more in warranty costs than other kinds of automotive parts suppliers. But who knew that the automotive electronics manufacturers pay out almost as much as the drivetrain companies?

December 4, 2014

Truck, Bus & RV Warranties: Most of the manufacturers are finding ways to reduce warranty costs, but some of the recent increases have been spectacularly huge. Still, the OEMs pay out more than their suppliers do, though the gap is narrower than it is in the passenger car industry.

November 20, 2014

Homebuilder & Supplier Warranties: Unlike in the automotive industry, where the OEMs have compelled their suppliers to pay a larger share of warranty costs, the homebuilders are reducing their share by selling fewer new houses. It's the building material suppliers who have learned how to cut warranty costs by reducing their expense rates.

September 11, 2014

Computer OEM & Supplier Warranties: Are the computer OEMs paying a growing or shrinking percentage of the warranty costs of their industry? Are the warranty costs of their suppliers rising or falling as a result of their efforts to make them split the bill?

September 4, 2014

Aerospace OEM & Supplier Warranties: Unlike the automotive business, aerospace manufacturers seem to divide warranty expenses equitably between OEMs and suppliers, both as a percentage of their revenue and as a percentage of the total cost.

August 28, 2014

Supplier Recovery Efforts: Are the automotive OEMs paying a growing or shrinking percentage of the warranty costs of their industry? Are the warranty costs of their suppliers rising or falling as a result of their efforts to make them split the bill?

August 21, 2014

Semiconductor Industry Warranty Report: In no other industry is the factory machinery so costly, and so expensive to maintain. And nowhere else does the output of the factory have such low warranty expense rates, compared to the machinery used to make it. It's as if the factory owners have shifted much of their warranty costs onto their equipment suppliers.

New Homes & Building Materials Warranty Report: As sales recover, warranty expense rates are getting back to normal for the builders. But some of their suppliers, such as the makers of electrical and plumbing fixtures, are now enjoying the results of a decade of warranty cost-cutting.

Auto Parts Supplier Warranty Report: Turns out it's the large truck and bus manufacturers and their engine, axle and transmission suppliers who haven't done much to reduce their warranty expenses over the past decade. Passenger car makers and suppliers of auto parts besides drivetrain components have done a much better job of cutting costs.

Aerospace Warranty Report: The makers of the actual planes and helicopters haven't done much to reduce their warranty expenses but their suppliers have done a remarkable job with their cost-cutting efforts. In this week's report, we look at both groups together and separately.

Large Vehicle Warranty Report: There's only a very narrow gap between the warranty expense rates of large vehicle manufacturers and their suppliers. And while some manufacturers are reducing their warranty costs, many are simply returning to the expense rates they've had for most of the past decade.

January 16, 2014

Aerospace Warranty Report: While a huge increase in Boeing's warranty costs is driving up the average for aerospace OEMs, the suppliers of avionics, jet engines, spare parts and other aircraft components are seeing their lowest warranty expense rates of the past decade.

New Home Warranties: Sales are rising and so are some warranty expenses. Builders and their suppliers, slammed by the recession, are getting back to normal. But who is figuring out their accruals per home and why are they doing it so badly?

Supplier Recovery: If all the warranty expenses that were caused by suppliers were paid by suppliers, what would the industry split be between them and the OEMs that they supply? And are the OEMs now recovering a quarter of what they could, half of what they could, or three-quarters of what they could?

Automotive Warranty Report: Automotive manufacturers are cutting their warranty costs to the lowest levels of the decade. Sales are recovering from the depths of the recession but warranty expense rates are remaining low. However, some of the suppliers are paying more as the OEMs get better at seeking reimbursements.

Computer Warranty Report: In terms of streamlining the warranty process so it can be as efficient as possible while making more reliable products, computer manufacturers and their suppliers are doing a great job. But at the same time, they went from spending the least on warranty in 2009 to the most ever in 2012. How can both statements be true?

Homebuilding Warranty Metrics: The builders of single-family homes were always good at shifting warranty expenses to their suppliers and subcontractors. And though their warranty expenses are down considerably, that has more to do with slow sales than with anything else.

October 4, 2012

Computer Supplier Warranties: Unlike in the automotive industry, computer makers are not trying to reduce their warranty expenses by shifting more of the burden onto suppliers. Instead, both OEMs and suppliers are reducing their costs by increasing product reliability.

September 27, 2012

Aerospace Warranty Metrics: Unlike in the automotive sector, the aerospace OEMs and their suppliers split warranty expenses more equally, and have similar expense rates. But while the suppliers have been reducing their warranty costs lately, the OEMs are not.

September 20, 2012

Automotive Warranty Metrics: While the major OEMs have made great strides with their warranty cost reduction programs and with efforts to use warranty data to improve product reliability, their suppliers are struggling to get back to where they were before the recession hit.

September 13, 2012

Fixtures, Furniture & Building Material Warranties: Though few of the companies in these segments are reducing their warranty expenses, some are actually seeing sales increases. In other words, some of the suppliers are seeing the beginning of a turnaround before the builders. How can that be?

Computer Warranties: While the computer OEMs still pay most of the claims, they've been very successful at cutting the percentage of sales they spend on warranty. Meanwhile, suppliers such as disk drive makers have also streamlined their warranty outlays, but the peripheral makers haven't been so lucky and are watching costs rise as a percentage of sales.

Automotive Warranty Report: While suppliers seem to have gotten a reprieve from escalating pressure to pay a greater share of warranty costs, OEMs are enjoying fast sales growth and a return to old levels. Meanwhile, Ford has decided to begin reporting warranty and recall costs together.

Aerospace Warranties: The makers of Boeings, Cessnas and Gulfstreams haven't made much improvement in the past five years. But their suppliers continue to boost revenue, cut costs, and reduce warranty expenses as a percentage of sales. And that divergence got worse as 2011 ended.

Truck Warranties: Unlike passenger cars, the truck OEM isn't usually responsible for the vehicle's entire warranty. Instead, many of the suppliers and component manufacturers issue their own warranties, and pay their own claims.

January 19, 2012

Aerospace Warranty Report: Unlike the auto industry, the suppliers of this industry account for the bulk of its warranty spending. And yet these suppliers have been steadily cutting their warranty costs year after year, while the airframe makers are paying more than ever before.

January 12, 2012

Automotive Warranty Report: As vehicle makers get back to normal and sales rebound, one thing that's not bouncing back is their warranty expense. Key warranty metrics continue to decline, including claims as a percentage of revenue. And once again, the warranty reserve fund balances of the top vehicle makers and their suppliers are growing.

September 22, 2011

Appliance & HVAC System
Warranty Report: Every journey includes a few bumps, and both appliance and HVAC makers have hit a few in the past couple of years. But like other building material suppliers, they're doing much better than the homebuilders, because they have both home renovations and replacements to fall back on.

Fixtures, Furniture & Building
Material Warranty Report: Sales have fallen but warranty costs aren't falling as fast. Still, it's not as bad as things in the new home industry, because suppliers can fall back on existing home renovations.

Disk Drive & Semiconductor Report: Warranty costs are falling for most of the high tech component makers, both in dollars spent and as a percent of sales. And unlike in the auto industry, the computer OEMs are not yet as accomplished at pushing their warranty costs back onto their parts suppliers.

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.

Automotive Warranty Report: After spiking to worrying levels in 2009, automotive warranty claims rates returned to normal in 2010, while the OEMs' accrual rates have never been lower. Their parts suppliers, however, continue to see their warranty costs escalate as the OEMs insist they share a bigger slice of the burden.

Automotive Supplier Warranties: While costs are down, so are sales. And while many suppliers are reporting higher sales in 2010, the proportion between their warranty costs and sales is higher than ever. And that's the unfortunate result of an increased effort by vehicle makers to push more of their warranty costs back onto their suppliers.

December 2, 2010

Japanese & European Warranties: While consumer electronics have some of the lowest warranty costs, computers have some of the highest claims rates. And telecom gear is somewhere in the middle, as a look at eight of the top international suppliers details.

Automotive Warranties: GM and Ford are cutting their warranty expenses and closing the gap with both their competitors and their suppliers. And it's beginning to get some notice in the daily newspapers. Truck makers aren't as lucky, but their year-ago figures weren't as dreadful.

Auto Part Supplier Warranties: Claims are up a bit but sales are down a lot. And while most suppliers have reduced accruals proportionally, at least one seems to have taken an accrual holiday.

Aerospace Warranty Trends: Unlike the computer and passenger car industries, in the commercial aviation industry the customer-facing brand names and their suppliers share warranty costs much more equitably. Then again, these multi-million-dollar jets and helicopters are hardly consumer products. And since safety and reliability are such top priorities, consistently low warranty costs are to be expected.

Auto Warranty Trends: While the RV makers are imploding, the farm vehicle makers are thriving. Somewhere in between are the passenger car and light truck makers, for whom warranty has become an important issue in the government bailout. But the 1.9% gap in warranty costs between OEMs and their suppliers remains firmly in place.

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.

WCM Keynote Address: For the first time, a top automotive executive delivers the keynote address at the WCM Conference next month in San Diego. His message to attendees will stress the need for common standards to improve warranty workflow among partners, suppliers, competitors, and dealers.

February 7, 2008

Automotive Warranties: What once looked like a trend turned out to be a temporary spike. So the gap between the warranty costs of OEMs and their suppliers remains close to 2% wide. But the good news is that warranty expenses are no longer soaring for automotive manufacturers.

January 31, 2008

Warranty Benchmarks, Part Two: Big companies really do pay more. The larger the manufacturer, the more warranty claims they pay. And in both the automotive and computer industries, OEMs tend to pay more claims than their parts suppliers.

October 31, 2007

Aerospace Warranties: In this industry, there doesn't seem to be a wide gap between the claims paid by aircraft makers and their suppliers, as is the case with cars and computers. In this respect, the makers of Boeing, Cessna, and Gulfstream aircraft are different from Ford, GM, HP, and Dell.

October 2, 2007

New Home & Appliance Warranties: At the midpoint of 2007, sales are falling faster than claims can be reduced, driving claims rate percentages upwards for many companies in the building trades. But unlike in the automotive or computer industries, claims in this sector were always rather evenly distributed among new home builders and their suppliers.

September 25, 2007

Computer & Peripheral Warranties: At midyear, it looks like many of the major brand names continue to cut their warranty expenses, as do many of their suppliers. But soon Dell will restate its warranty accruals and that could erase the declines completely. Or will it add to them?

September 18, 2007

Automotive Warranties: Are claims soaring or falling? It depends how you slice the market. One way is to compare OEMs to their suppliers. Another is to group OEMs by the size of the vehicles they make. Either way, passenger car and light truck makers always seem to end up paying the most.

September 11, 2007

Automotive Warranties: While GM and Ford spend the most on warranty, other types of vehicle manufacturers pay out a greater share of their total revenue on claims. And while most parts suppliers have relatively low claims rates, those in the aftermarket report some of the highest rates of all.

Customer Recovery: While efforts to push warranty costs back onto suppliers have met with limited success, a handful of manufacturers have pushed most if not all of their warranty expenses back onto their customers.

January 24, 2006

Semiconductor Warranties: In most industries, the consumer-facing brand name suffers most of the warranty cost, and their suppliers get off lightly. But with semiconductors, it's the production platform providers who are left holding the bag.

December 6, 2005

Auto Warranties: It's not just Ford and GM. There are numerous other types of vehicles, and numerous automotive suppliers to those OEMs who each have their own characteristics when it comes to warranty claims and accrual rates.

September 8, 2004

Warranty Claims Rates: In both the automotive and computer industries, the OEM -- the brand name on the product -- is frequently left holding the bag when it comes time to pay warranty claims. As the latest data shows, their suppliers usually see much lower warranty claims rates.

Jetliner Warranties: In the good old days, the airlines and aviation parts manufacturers already swamped by regulatory paperwork had little time for the additional bother of warranty claims. But in an era of falling revenue and rising costs, warranty has suddenly become very important to both operators and their suppliers.

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