Tecumseh Products 2012 Annual Report Download - page 12

11
We are also subject to additional disclosure requirements, including conflict minerals disclosure requirements and compliance
with these new requirements could have a material adverse impact on our results of operations, financial condition and
liquidity, as well as, divert management's attention away from running our business.
Our operations and products are subject to extensive environmental laws and energy regulations.
Our manufacturing operations are subject to stringent environmental laws and regulations in all of the countries in which we
operate, including laws and regulations governing emissions to air, discharges to water and the generation, handling, storage,
transportation, treatment and disposal of waste materials. These regulations can vary widely across the countries in which we do
business. While we believe that we are in compliance in all material respects with these environmental laws and regulations, we
could still be adversely impacted by costs, liabilities or claims with respect to existing, previously divested, or subsequently
acquired operations, under either present laws and regulations or those that may be adopted or imposed in the future. We are
also subject to laws requiring the cleanup of contaminated property. If a release of hazardous substances occurs at or from any
of our current or former properties or at a landfill or another location where we have disposed of hazardous materials, we may
be held liable for the contamination and the amount of such liability could be material. See “Item 8 – Financial Statements and
Supplementary Data – Note 15 “Commitments and Contingencies – Litigation – Environmental Matters” of Notes to
Consolidated Financial Statements" for a description of our environmental matters.
In addition, governmental regulations control the types of refrigerants that may be utilized in our products, and this global
scrutiny continues to evolve over time. We have continued to address these changes in regulation by approving and releasing
new models that meet governmental and consumer requirements. We also strive to have our products meet requirements for
energy efficiency, which can vary substantially in the different geographic markets in which we sell our products. Future
legislation may require substantial levels of expenditure to meet industry requirements, which could have a material adverse
effect on our business, results of operations and financial condition.
Increased or unexpected product warranty claims could adversely affect us.
We provide our customers a warranty on products we manufacture. Our warranty generally provides that products will be free
from defects for periods ranging from 12 months to 36 months. If a product fails to comply with the warranty, we may be
obligated, at our expense, to correct any defect by repairing or replacing the defective product. Although we maintain warranty
reserves in an amount based primarily on the number of units shipped and on historical and anticipated warranty claims, future
warranty claims might not follow historical patterns or we might not accurately anticipate the level of future warranty claims.
An increase in the rate of warranty claims or the occurrence of unexpected warranty claims could materially and adversely
affect our financial condition, results of operations and cash flows.
We may be adversely impacted by work stoppages and other labor matters.
As of December 31, 2012, we employed approximately 5,800 full-time equivalent employees and an additional 1,900
temporary employees and contractors worldwide. The majority of people we employ on a full time and temporary basis are in
foreign locations and approximately 4,600 are represented by national trade unions. While we do not believe that we will be
impacted by work stoppages and other labor matters, future issues with our labor unions might not be resolved favorably and
we might encounter future strikes, further unionization efforts or other types of conflicts with labor unions or our employees.
Any of these factors may have an adverse effect on us or may limit our flexibility in dealing with our workforce. In addition,
many of our customers have unionized work forces. Work stoppages or slow-downs experienced by our customers could result
in slow-downs or closures at their plants where our products are installed. If one or more of our customers experience a material
work stoppage, it could have a material adverse effect on our business, results of operations and financial condition.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.