Management Accounting

Lear Receives Subpoena in GM Probe

The order seeks documents relating to payments or credits to GM going back to 2001.
Stephen TaubMarch 10, 2006

Officials at Lear Corp. reported that the company received a subpoena from the Securities and Exchange Commission related to the regulator’s investigation of General Motors Corp. The auto-parts maker disclosed in its annual report filed with the SEC that the investigation is tied to a previously announced probe of GM’s accounting for payments and credits by suppliers.

The subpoena seeks documents relating to payments or credits to GM going back to 2001, according to the filing. Company officials pledged their full cooperation to the SEC during the investigation process.

In October, GM noted in a regulatory filing that the SEC is investigating pension and other postemployment benefits, as well as GM’s recovery of recall costs from suppliers and supplier price reductions or credits.

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Earlier this week, Lear announced that it will decrease its fourth-quarter sales by $6 million and increase its fourth-quarter loss by $6 million. This change comes after a major customer said it was withholding certain payments as a result of retroactive pricing adjustments associated with a vehicle program for shipments made prior to 2006. The vehicle program is no longer in production, noted the Lear announcement.

Lear did not name the customer in its disclosure.

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