GM seeking $28 million from Johnson Controls in battery lawsuit

Automaker trying to recover warranty costs from 2014-16 models

General Motors is seeking $28 million from automotive battery maker Johnson Controls under the terms of a series of settlement agreements the two companies reached regarding GM’s 2014 to 2016 model year vehicles.

Johnson Controls, which is based in Ireland for tax purposes but operates from a headquarters in Glendale, produces around 154 million batteries annually and supplied a large percentage the batteries GM used on the model years in question, according to the lawsuit.

“We have fully complied with all of our contractual obligations to General Motors and intend to continue to do so in the future,” Johnson Controls said in a statement. “While we truly value our long-term relationship and partnership, we intend to defend the case vigorously.”

GM used JCI batteries on Chevrolet, Buick, GMC and Cadillac vehicles. After honoring customer warranty claims related to the batteries, GM asked Johnson Controls to reimburse GM for costs related to replacing batteries it had provided.

The two companies ended up reaching agreements in 2015, 2016 and 2017 that called for JCI to make a lump sum payment to GM and then to pay a percentage of all future claims. The 2015 agreement called for a nearly $1.5 million payment, the 2016 deal included a $1 million payment and 2017 called for a roughly $944,000 payment.

Each deal also called for JCI to pick up 35.4 to 36.4 percent of “all costs and expenses,” according to the lawsuit.

“JCI has failed to reimburse GM for the agreed percentage of all GM customer warranty claims incurred by GM during the entire warranty period of the vehicles at issue, and instead has incorrectly limited its reimbursement to a percentage of those GM customer warranty claims arising during the vehicles’ first 12 months in service,” the complaint says.

The lawsuit, filed in the U.S. District Court for Eastern Michigan, makes three claims that JCI has breached its contracts with GM. The automaker says it is owed nearly $10.9 million for 2014 model year vehicles, $11.4 million for model year 2015 vehicles and $6.6 million for model year 2016.

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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