Risk Assessments

Stout was founded in Detroit over 27 years ago, so our automotive roots run deep. We are recognized internationally as the leading advisory firm in the automotive sector and as preeminent experts of automotive recall risks, data, and costs. Our professionals have advised companies ranging from multinational, publicly traded OEMs and Tier 1 suppliers to closely held component suppliers around the world. We have also worked with franchised and independent dealerships, raw material suppliers, logistics and data providers, and other stakeholders and participants in the automotive supply chain.

We understand the complex relationship between OEMs and tiered automotive suppliers, both internationally and domestically. Our expertise is the result of hundreds of transactional, valuation, consulting, and dispute advisory engagements across the automotive supply chain each year. Our technical knowledge reaches far beyond general risk, economic and financial theory to the specialized, industry-specific considerations of the automotive manufacturing and distribution supply chain.

With this expertise, we are able to help clients understand the risk and economic costs of warranty service repair, recall campaigns, and other actions.

Pre-Incident and Risk Consulting

On behalf of OEMs and suppliers, Stout provides the following pre-incident and risk preparedness consulting services:

Supplier Internal Data and Process Review

  • Analysis of manufacturing and warranty claims data to identify and model potential defect trends
  • Probative review of warranty and recall data collection systems to identify opportunities to improved internal processes
  • Review of opportunities for internal collaboration or information sharing regarding recall risks and mitigation opportunities
  • Identification of other potential organizational risks factors

External Assessment

  • Analysis of external data to identify defect trends and develop insights into potential recall risk factors
  • Probability of defect and tail risk, cost distributions, indicators or remedy completion, and distribution of recall sizes

Analysis of Comparable Components

  • Identification and analysis of components exhibiting similar design, manufacture, functionality, or deployment
  • Detection of nascent defect trends where subject component defect data is not yet available

Assistance With Strategic Integration of Data

  • Development and implementation of processes and protocols allowing organizations to leverage cross-functional expertise
  • Collection and evaluation of warranty and recall claims data
  • Execution of appropriate incident response

Post-Incident Consulting

Stout provides the following post-incident consulting services to automotive OEMs and suppliers:

Preliminary Recall Cost Estimates

  • Assessment of factors influencing the total costs of recalls
  • Identification of the relevant vehicle population
  • Analysis of factors influencing recall repair completion percentages, materials and part costs, supply chain charges, dealer costs and mark-ups, repair labor costs, and additional potential costs of recall administration and regulatory compliance

Evaluation of Recall Cost Claims

  • Analysis of recall cost claims prepared by manufacturers and submitted to suppliers for cost recovery
  • Validation of the methodology applied to develop claims
  • Substantiation of claim costs and inputs

Evaluation of Supplier Viability for Recall Cost Collection

  • Comprehensive assessment of the financial condition of suppliers faced with potential cost recovery to evaluate their ability to withstand actual or potential cost recovery claims

Litigation Assistance

  • Support of clients and their counsel throughout the recall litigation process
  • Assessment of needs for additional information and responses to requests from opposing parties
  • Identification of key issues and assistance with the development of an overall litigation strategy and response
  • Assistance with settlement negotiations

Expert Witness Services

  • Expert analysis of cost recovery claims
  • Preparation of appropriate disclosures including expert witness reports
  • Proffering of expert witness testimony in federal or state court, arbitration hearings (including international tribunals), or other venues

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