For 1990-2009 cars

# Warranty Admin. - GM Dealer Empowerment Program and Goodwill Procedures

Subject: | Warranty Admin -- GM Dealer Empowerment Program and Goodwill Procedures

Models: | 2008 and Prior Passenger Cars and Trucks

| 2008 and Prior Saturn Vehicles - Sold in Canada ONLY

| 2008 and Prior HUMMER H2, H3

This bulletin is being revised to update the model year and information. Please discard Corporate Bulletin Number 05-00-89-055A (Section 00 - General Information).

This bulletin is being provided to clarify proper claim administration of those cases.

### Program Intent and Responsibility

The purpose of dealer empowerment is to administer goodwill and address special circumstances that provide prompt, responsible, point-of-service decision making capability which results in both quality service and a completely satisfied customer experience. This empowerment program provides GM dealers with a determined level of responsibility to make decisions regarding payment for repairs. These decisions are in the form of dealer management approvals and claim authorizations for situations that are outside the written terms of the New Vehicle Limited Warranty. Empowered decisions must be made on a case by case basis and supported with valid business reasons.

### Making Empowered Decisions

The warranty covers repairs to correct any vehicle defect related to materials or workmanship performed during the manufacturing process. Such repairs must be made using the appropriate GM part(s) and published GM labor times. However, dealers are empowered at various levels with the discretion to make case-by-case Goodwill Decisions that are exceptions to GM's standard policy, for good business reasons, when the circumstances surrounding the transaction are special. The main purpose is to affect quality repairs and meet reasonable and rational customer expectations. These decisions can be during or beyond the time and mileage limitations of the New Vehicle Limited Warranty. Sometimes during the warranty period, guidelines that establish what is not covered are not clearly obvious when dealership personnel are discussing the condition with a customer. For this reason, and questionable situations that do not have exact proof of what transpired, should be reviewed in the same manner as situations outside of the warranty time and mileage. These decisions should also be made on a case by case basis.

### Documentation and Claims Submission Requirements for Empowered Decisions

If Service Management elects to pay for the repair or replacement of a component in a questionable situation during the warranty coverage periods, they are required to clearly document the repair order with the reasons for the decision . If Service Management elects to pay for the repair or replacement of the component outside the terms of the New Vehicle Warranty coverage periods, they are also required to clearly document the term "Goodwill" on the repair order along with the reasons for the decision. With the development of the Enhanced Dealer Empowerment program, dealership service management has been given additional tools to ensure customer satisfaction throughout the customer's ownership experience. When goodwill decisions are appropriate, proper repair order documentation by service management and claims submission by the warranty administrator is essential to fully explain the reason for the decision.

Properly maintained files should provide a complete history for yourself and GM in support of your empowered decisions. From time to time, your records will be reviewed. If your records do not support your claims, the claims will be debited, even if previously authorized either by wholesale or retail.

Repair order documentation must include the reason for issuing authorization, date approved, signature of service management and the appropriate authorization code(s). Warranty Administrators must apply the appropriate labor operation for the repair, a failure code of 98 (Customer Satisfaction) and the appropriate authorization code(s) to the warranty claim submission.

#### Example

Repair Performed | Part Count | Part No. | CC | FC | Labor Op | Labor Hours | Net Item
--- | --- | --- | --- | --- | --- | --- | ---
Replace Seat Cover | 1 | 88951645 | *V9 | **98 | C6871 | 0.2 | ***360.00

* The Customer/Condition code should represent the applicable reason that the customer brought the vehicle into the service department.

** The Failure Code should be reflected as "98" and represent that the claim was submitted for Customer Satisfaction purposes.

*** The amount identified in the "Line Total" column represents the actual amount of General Motors participation in the Empowered Decision.

### Identifying the Facts

Empowerment should be exercised when it appears that, in the interests of customer loyalty, an adjustment should be made. Empowerment should not be exercised to correct conditions occurring from aging, physical damage, lack of proper maintenance or abuse. Vehicle concerns should be assessed on their own merits within the context of the current owner's reasonable expectations and with appropriate concern for the cost to GM.

In exercising your judgment in each case, the following questions are some which should be considered.

• | Is the vehicle covered by other service or extended warranty contracts?

| If yes, repairs must be performed under that contract.

• | Does the vehicle show a lack of proper care and maintenance?

• | Is the overall condition of the vehicle such that the cost of the repair will approximate the vehicle's value?

• | If the vehicle was purchased used by the current owner, is it likely the vehicle exhibited the condition before purchase?

• | Did the condition occur while the vehicle was in the possession of a second or third owner and no vehicle history is available?

• | Could the customer have done anything to prevent or cause the condition?

• | Has the vehicle been used in ways for which it was not intended?

• | Did the condition result from an aftermarket conversion or alteration?

• | Did the condition result from the use of non-GM parts or accessories?

• | Is there evidence of odometer tampering or alteration?

• | Is the vehicle condition a normal operating characteristic?

• | Is the condition largely a result of unusual localized environmental, geographical or climate factors?

Additional questions when paint condition is the concern:

• | Is the condition largely the result of normal paint aging or environmental damage (fading, gloss loss, chalking, flaking, and yellowing)?

• | Is the condition only on a physically damaged panel that the customer declines to repair?

The lists above are not intended to be all-inclusive. However, if the answer to any of these or similar questions is "yes", then it probably is not a concern you should address at GM's expense.

Justifying empowered decisions with an opinion that "they're a good customer" without other supporting business reasons is not an acceptable practice. In such situations you can help strengthen your position by committing to an equally shared responsibility between GM and your dealer. If you cannot commit to a shared responsibility, then perhaps the correct decision should be one of offering no goodwill adjustment.

### Partial or Shared Responsibilities

In situations beyond the warranty period, but within your claim authorization empowerment, customers have received value from the use of their vehicle. It may be reasonable to consider partial payment by the customer, dealer, and/or GM, thus sharing responsibility for the repair expense. Consider the interests of the customer, the dealership and GM when determining the sharing of costs. Use the following guidelines to assist in the decision making process:

• | Determine what the customer expects before making an offer to assist.

• | Evaluate the reasonableness of the customer's expectations.

• | Determine what offer would satisfy the customer as a fair and equitable adjustment.

• | Make your evaluation of the situation through direct communication with the customer.

• | Always strive for a mutually acceptable agreement.

• | Is the dealership willing to match what GM will pay?

#### Example

Repair Performed | Part Count | Part No. | CC | FC | Labor Op | Labor Hours | Net Item
--- | --- | --- | --- | --- | --- | --- | ---
Replace Transmission | N/A | N/A | *O4 | **98 | K7000 | N/A | ***900.00

* The customer code should represent the applicable reason that the customer brought the vehicle into the service department.

** The Failure Code should be reflected as "98" and represent that the claim was submitted for Customer Satisfaction purposes.

*** The amount identified in the "Net Item" column should represent the actual amount of General Motors participation in the Goodwill Adjustment.

Empowerment is NOT :

• | Permission to deviate from the GM Service Policies and Procedures Manual, repair order write-up and documentation requirements, or shop supervision requirements.

• | Permission to authorize claims which are not a GM responsibility, including:

- | Repairs, adjustments, or reconditioning required as the result of damage

- | Used vehicle reconditioning

- | Repairs covered by extended service plans or contracts

- | Unjustified, undocumented, unsubstantiated additional labor time

- | Unnecessary or excessive parts replacement

- | Repetitive repairs resulting from poor dealer diagnosis or workmanship.

• | Permission for the Claims Administrator to apply approval codes for claims payment.

### Delegation of Empowerment

The dealer is to designate one person responsible and accountable for all approvals issued by service management. Typically, this would be the Service Manager or Service Director. When portions of responsibilities are delegated to others, those who become empowered are to be members of the Service Management team, responsible for the supervision of employees, the performance of the Service Department and the contractual responsibility to properly administer GM warranties. Service technicians, claims administrators, or other support personnel are not to be empowered for these types of management approvals. All such delegation of approval is to be monitored by the Service Manager or Director, on a routine basis.

### Scope of Empowerment

The decision making responsibility of empowerment translates into the use and application of GM labor operation numbers, claim types, and authorization codes. It is GM's expectation for all dealers to operate at the maximum levels of empowerment. Each element of empowerment may be independently adjusted among the listed alternatives. Additionally, the use of certain labor operation numbers and/or claim types may be prohibited from dealer use, without wholesale authorization.

At maximum levels, a dealer will be empowered as follows:

Use of authorization code A = | 24 months/24,000 miles (40,000 km)*
For exterior paint conditions = | 24 months/unlimited miles (km)*
Use of authorization code B = | Yes
Use of authorization code E = | Up to 2 hours
Use of authorization code G = | Yes
Use of authorization code P = | Yes
Customer reimbursement maximum = | $1,000
Use of labor operation numbers = | Unrestricted
Use of claim types = | Unrestricted*
* Beyond the time and/or mileage (kilometrage) limits of the GM New Vehicle Limited Warranty.

The full range of empowerment level alternatives are as follows:

Use of authorization code A = | 24 months/24,000 miles (40,000 km)* 12 months/12,000 miles (20,000 km)* None
For exterior paint conditions = | 24 months/unlimited miles (km)* 12 months/unlimited miles (km)* None
Use of authorization code B = | Yes or No
Use of authorization code E = | Up to 2, 1 or 0 hours
Use of authorization code G = | Yes or No
Use of authorization code P = | Yes or No
Customer reimbursement maximum = | $1,000 $300 None
Use of labor operation numbers = | Unrestricted, specific labor restrictions, or restricted ranges of operations
Use of claim types = | Unrestricted, specific claim types restrictions*
* Beyond the time and/or mileage (kilometrage) limits of the GM New Vehicle Limited Warranty.

### Empowerment by Dealership Location

The scope of empowerment will be decided upon and set within GM systems by region. The empowerment profile will apply to all GM franchises operating at the site. Changes to dealership empowerment levels will be communicated to the dealer and service management by regional service representatives.

### Monitoring

Current customer satisfaction and warranty expense reports are available for use in monitoring performance trends associated with empowerment. As the process of common empowerment matures, the creation of more specific measurements and reports may be necessary or appropriate.

Current customer satisfaction and expense trend information is available to assist you and your wholesale service representative to monitor your use of empowerment. If areas of concern arise, your wholesale service representative may offer specific counsel, or suggest certain dealer administrated controls to be placed into effect. In unresponsive situations, or where substantial risk exists, your empowerment in the specific area(s) of concern may be reduced or eliminated until the risk or situation is corrected. As the risks become managed to acceptable levels, empowerment will be restored to higher levels.

### Retail Use of Authorization Codes

#### Authorization Code A -- Goodwill Adjustments

Goodwill adjustments include the ability to make case-by-case decisions on repairs that are beyond the time and/or mileage (kilometrage) limits or outside the terms of the GM New Vehicle Limited Warranty period. There may be situations where goodwill adjustments beyond the dealer's empowerment level are appropriate. In such cases, wholesale authorization is required prior to the repair being performed.

Goodwill should NOT be considered in any of the following events:

• | Recently purchased vehicles (used cars, auction vehicles, fleet vehicles, etc.) that exhibited the condition due to lack of maintenance, wear, misuse, physical damage, accidents or alterations at the time of purchase.

• | Failures covered by an extended warranty or service contract. Goodwill adjustments are intended to increase/gain owner loyalty, not to reduce liability of contract underwriters.

• | Repairs benefiting any licensed dealer (including non-GM) for used vehicles being traded, purchased from GM auction or in dealer inventory as a means of increasing the value of the unit or to reduce reconditioning expenses.

• | Paint finish concerns presented for consideration beyond five years from in-service date.

Dealer authorization empowerment for paint claims covers exterior body panels only. The following paint labor operations are excluded from the unlimited mileage (kilometrage) paint empowerment:

A0110 -- Finesse Sand and Buff

A3740 - A4260 -- Replace Paint Stripe

A4340 - A4700 -- Replace Decal Stripe

A5020 - A5127 -- Replace Wood Grain Transfer

A5541 - A5560 -- Paint Chemical Spotting

A5575 - A5580 -- Rail Dust Removal

A7000 - A8200 -- Interior Paint

A9040 - A9640 -- Panel Repairs

#### Authorization Code B -- Repeat, Related Repairs

Authorizes payment for repairs to be performed which repeat or overlap previously performed repairs. Allows you to consider authorizing repairs identical or similar to repairs that have been previously performed on the vehicle. Facts must support that the repair is justifiable and is not the result of previous improper or incomplete workmanship or diagnosis.

Authorization for Repeat/Related Repair would be used in the following instances:

• | Repairs caused by defective parts and/or workmanship on the part of the manufacturer.

• | Repairs previously but unsuccessfully attempted by a different authorized GM servicing agent, to address customer's complaint.

The following are NOT to be considered for Repeat/Related Repair authorization:

• | Improper diagnosis

• | Inadequate technician training

• | Use of improper tools, equipment and repair procedures

• | Repairs by an independent shop or other individual

• | GM part warranty claim

• | Non-GM part failures or failures attributable to such parts

It is the responsibility of the dealer to perform repairs correctly the first time. Authorization code "B" should not be used for the following repairs:

• | Wheel alignments

• | Wheel balancing

• | Paint repairs

#### Authorization Code E -- Other Labor Hours

Those exceptional cases where a repair requires Other Labor Hours (OLH) considered as part of the repair procedure. All "published" add times, such as sublet allowance, add times, diagnosis times, mix times, etc. are submitted as regular labor hours and do not require authorization.

Instances when OLH may be required include:

• | Unusual repair procedure not covered in the GM Service Manual and Labor Time Guide (LTG). Such may be the case where a bolt was broken and extra time was required to drill it out.

• | Diagnosis time not published.

• | Labor times to complete electrical connector/wire repairs in excess of published "ST" 0.5 hour limit.

• | Labor times to address any additional damage caused by the primary failed component. Total not to exceed established labor time if applicable.

• | Variable strip time for involved panel refinishing. Not to exceed "calculated" limit.

Instances when OLH is NOT the responsibility of GM:

• | Inadequate technician training

• | Lack of and/or improper tools and equipment

• | Improper repair procedures

• | Unnecessary and/or excessive repairs

• | Improper shop supervision

If unusual circumstances are encountered which would require Other Labor Hours:

• | The technician is to contact service management for approval PRIOR to the work being performed.

• | Service management approval is required for the technician to proceed on an Other Labor Hours basis.

• | Service management must sign the "on time" and record the reason for the repair. Separate on/off time recording is required for each Other Labor Hours operation.

• | Service management must justify the reasonableness of the Other Labor Hours request.

• | Technician inefficiency or lack of training is not sufficient justification for Other Labor Hours.

#### Authorization Code G -- Miscellaneous Return Codes, Customer Reimbursement Claims, MIC Claims

As a means to reduce service management authorization workload, the requirement for use of the authorization code G is reduced. The "G" authorization code is no longer required on the following claim types:

• | C = Service Parts Replacement Without Labor Claim

• | D = Case Add Credit Claim

• | M = Vehicle Warranty Deductible Override Claim

Although these claims no longer require service management authorization, it may be appropriate to establish an internal management control process to monitor compliance with GM Service Policies and Procedures.

Authorization code "G" is required when submitting the following claim types:

• | B = Service Parts Replacement Claim

• | N = GM Consumer Parts and Accessories Warranty Claim (GMSPO)

• | S = Customer Reimbursement Claim

• | 1 = MIC/GMPP Case Add Credit

• | 3 = MIC/GMPP Deductible Override

Authorization code "G" is required in response to the following claim return codes:

• | 15 = VIN Missing (Claim Types B, G and N Only)

• | 16 = VIN Invalid (Claim Types B, G and N Only)

• | LR = Labor Op Requires Dealer Authorization

• | MD = No Original Claim Found For Case Debit

• | VA = VIN Not Found On File (Claim Types, B, C and N Only)

• | VF = VIN Warranty Is Blocked For Repair (Claim Type G Only)

• | VJ = VIN Warranty Has Been Voided (Claim Type G Only)

• | WA = VIN Past Model (Claim Types B, C and N Only)

• | WB = VIN Beyond Policy Approval Guidelines (Claim Types B, C and N Only)

Refer to General Motors Service Policies and Procedures and WINS Claims Processing Manual (Section VII) for appropriate use of these special claim types. Authorization code "G" is not required for use in conjunction with any other special claim type. Some return codes may be overridden with authorization code "G". Dealer should refer to the authorization matrix (Section V, page 5 of the WINS Claims Processing Manual) as required.

Customer Reimbursement (Claim Type "S") is to be used when a decision has been made to reimburse a customer for warranted repair costs incurred by the customer. Reimbursement is made in the form of a check issued by the dealer directly to the customer. Customer reimbursement is to be made only to the person who owns or leases the vehicle at the time or repair, or the person who incurred the expense, if different. Dealer should obtain and retain the customer's original paid receipt or invoice and provide the customer with a photocopy for their records. Repair orders written for customer reimbursement must include the customer's description of the event causing the out-of-pocket expense and note the dealer's reimbursement check number(s). Dealer is to provide canceled check upon request as proof of reimbursement.

#### Authorization Code P -- Part/Net Excessive

Auth Code P is for exceptional cases where a repair requires additional parts and/or net amounts exceeding the amount(s) allowed for the labor operation involved. Towing is not included in the net amount field of the repair claim line. Labor operation T2020 must be submitted as a separate line item to cover the tow expense. An explanation of the excessive part or net amount must be noted on the repair order. If additional parts are required for the excessive repair, note the part numbers used on the repair order.

Maximum dealer empowerment is $5 or 5% of the case line total, whichever is greater. Amounts exceeding this limit will require wholesale authorization. GM reserves the right to adjust the ceiling of the retail limit at anytime.

Please ensure that all dealership service personnel are aware of these procedures. If you have any questions, please contact your District Service or Parts Manager.