Company: THRM
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0000950170-25-023344
Chunk: 176

Company: Gentherm Inc
Filing Date: 2025-02-19
Form: 10-K
Item: Item 1B
Chunk 176
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, including any claims filed by customers, the warranty accrual is adjusted quarterly to reflect management’s estimate of future claims.On February 14, 2024, the National Highway Traffic Safety Administration announced that Volkswagen Group of America, Inc. (“VW”) is recalling 261,257 vehicles from model years 2015-2020 to remedy an alleged problem with a suction jet pump seal inside the fuel tank system. VW informed Gentherm of its plan to conduct the recall on April 3, 2024. The suction jet pump is a product originally designed and manufactured by Alfmeier, the business Gentherm acquired in August 2022. The Company has not accepted any financial responsibility for the recall and intends to provide replacement parts for the recall at commercial pricing paid by VW. The Company is pursuing discussions with VW to advance its position and resolve this matter. No litigation has been threatened or filed as of the date of this report. If the Company is obligated to indemnify VW for the direct and indirect costs associated with the recall, such costs could be material. The Company has insurance policies that generally include coverage of the costs of a recall, subject to insured limits, although the Company’s costs related to manufacturing of replacement parts are generally not covered. In addition, the Company’s purchase agreement of Alfmeier includes indemnification provisions under which the Company believes it would have a claim against the sellers. Given the uncertainty that exists concerning the resolution of this matter, as of the date of this report, the Company cannot reasonably estimate the amount and timing of possible costs that may be incurred by the Company.The following is a reconciliation of the changes in accrued warranty costs: 

        Year Ended December 31,

        2024

        2023

        Balance at beginning of year
         
        $
        3,945

        $
        2,380

        Warranty claims paid

        (6,382
        )

        (2,252
        )

        Warranty expense for products shipped during the current period

        5,812

        3,955

        Adjustments to warranty estimates from prior periods

        247

        (174
        )

        Adjustments due to currency translation

        (115
        )

        36

        Balance at end of year
         
        $
        3,507

        $
        3,945

      EmployeesApproximately 35% of the Company’s workforce are members of industrial trade unions or worker councils and are employed under the