Opinion ID: 202158
Heading Depth: 2
Heading Rank: 2

Heading: GM's Nationwide Uniform Warranty Reimbursement System

Text: 4 GM distributes its automobiles through a nationwide network of authorized dealers. Darling's has been a Maine-based authorized GM dealer since 1994, selling three lines of GM vehicles (Buick, Pontiac and GMC) under successive versions of the Dealer Sales and Service Agreement (Dealer Agreement), the most recent of which was executed in 2000. Pursuant to the Dealer Agreement, Darling's must perform warranty repairs on qualified vehicles and GM must reimburse Darling's for parts and labor in accordance with the Service Policies and Procedures Manual (Service Manual). 3 GM reimburses its North American dealers based on a uniform methodology that uses a fixed markup for the cost of parts (usually 40 percent), and the dealers' established hourly rates for labor, multiplied by GM's labor time guidelines, which provide the number of labor hours allotted for a specific repair. 5 GM processes warranty reimbursement clams through a nationwide computer system called the Warranty Information System (WINS). WINS, which allows dealers to submit claims electronically, was developed in the mid-1990s to standardize GM's warranty claims processing across all of its lines. Before WINS, a dealer which sold three different lines of GM vehicles, like Darling's, was required to submit separate reimbursement claims through three distinct processing systems. All of GM's dealers in the United States, Canada, Mexico and the Caribbean now use WINS. Annually, GM uses the system to pay approximately 48 million claims (including some non-warranty claims) worth over four billion dollars. 6 WINS requires each warranty reimbursement claim to include the dealer's repair order number, the date of service, the vehicle identification number (VIN), the applicable labor operation number, the failed part number, and the parts reimbursement amount. Within five days of submission, WINS automatically reviews the claim to determine whether it is within certain basic parameters based on the information provided in the claim and any existing electronic records for the vehicle corresponding to the entered VIN. 4 If WINS finds an error in the claim, the dealer is notified electronically. If the claim passes the initial check, GM reimburses the dealer based on a uniform methodology. WINS calculates the maximum labor reimbursement by multiplying GM's time guidelines for the repair by the dealer's approved labor rate, which is usually an average of the rates a dealer has charged for all manner of repairs. It calculates the maximum parts reimbursement by multiplying the cost of the parts by the established parts markup rate for that dealer, which is usually 40 percent. As long as the total amount requested by the dealer does not exceed these ceilings, WINS automatically approves the claim and credits the dealer through an open account held jointly by GM and the dealer. Approximately 90 percent of all WINS claims are approved in this way and are paid within seven to ten days of the initial claim submission. 7