I’m busy chasing the story about Comcast’s decision to pull the ad from the Ad Hoc Committee of Consumer Victims of GM and Chrysler re: the automakers’ attempts to walk away from safety-related claims against their “old” incarnations. I’ve got calls into the left coast lawyers who have first-hand knowledge of the circumstances surrounding the self-imposed censorship. Meanwhile, Sean Kane, the president of advocacy group Safety Research and Strategies (SRS), says the ad was pulled after a call from GM’s lawyers to Comcast. He also shared this pdf: Public Safety at Risk. “If GM is allowed to assign liability for its pre-New GM vehicles to old GM, it will remove the incentive for claimants to file,” Kane contends. “It would remove an important surveillance device for the NHTSA.”
“If this stands, Chrysler and now GM are trying to create two tiers of safety; one for consumers who bought a car before they exited Chapter 11, one for consumers who bought one afterwards.” In fact, Kane recommends that car buyers hold off on buying any GM product until this issue is resolved. “How can you buy a product from a company that’s not going to stand behind its products fully?”
As regular readers know, TTAC contributor and bankruptcy lawyer Steve Jakubowsky is hard at work, representing claimants who want New GM to be liable for products manufactured by Old GM. “Chrysler won the first battle,” Jakubowsky told me this morning. “But this time we’re better organized and more articulate.”
Look for this issue to gain traction. Stiffed GM bondholders will not—can not—gain public sympathy. As sad as this sounds, victims of defective automobiles are honey to the media bee. The story writes itself.
In fact, you have to wonder why New GM doesn’t just take the hit—remembering that this is NOT about admitting liability, only the victims’ right to potential restitution from New GM. Also keeping in mind the fact that GM will soon be owned by the federal government.
“What could it cost them?” Jakubowsky asks. “A billion?” So is New GM just Old GM redux? Roger that. “It just shows that the same old spreadsheet mentality is alive and well at the top of GM.”
I’m sure it will do wonders for their resale value. If you thought your Poniac G5 or Chrysler Sebring was going to take a beating, just wait!
As a compromise, “New” Chrysler and GM should offer “Old” customers coupons for $5 off a crash helmet, flame retardant suit, or fire extinguisher.
The answer to this is a pretty simple recipe.
1) Take this blog title New GM Running from 3400 Old GM Safety Claims per Year
2) Add this comment … GM will soon be owned by the federal government.
3) The result is “The Federal Government Running from 3400 Old GM Safety Claims per Year”.
Considering there’s no bloc political constituency to be served by paying off these old claims, is this any real surprise?
Question.
If GM gets off the hook on it’s obligations to owners of cars bought from the old GM then shouldn’t people who are still making payments to them that bought from old GM be released from their obligation?
What say Prez Goodwrench? Are you a huggy-love liberal looking to “help the little guy” or a corporate tool?
Chuckle.
Bunter
@Farago:
“So is New GM just Old GM redux? Roger that.”
Did you intend this delicious Roger Smith pun?
Bunter: Those owners who financed purchases of GM cars are making payments to the institutions underwriting the loans, not to GM.
It was my understanding that old liabilities are one of the things a company in chapter eleven bankruptcy was able to shed. If such is the case, then your beef is with bankruptcy law, not GM itself.