Disclosure: I'm proud to be working with the The Ad Hoc Committee of Consumer Victims of GM & Chrysler.
Today GM's final bankruptcy hearing will determine whether or not they accept liability for harm caused to consumers by defective GM cars built before the "re-launch of GM".
All indications point to no. In response to pressure from consumers, "New GM" has agreed to cover future liabilities from cars built before the bankruptcy ("Old GM"). But they are still walking away from pending liabilities for accidents that have already happened, leaving thousands of victims without recourse.
From the Car Gurus blog:
As part of GM's bankruptcy filing, it's possible it will no longer be liable for injuries or deaths caused by vehicles built by the "old GM." Our friends at Autoblog reported that GM may be reconsidering, but Chrysler set a precedent earlier this month when they emerged from bankruptcy free from such liabilities.
So if you're driving around in an `06 Cherokee or a `94 Lumina, and it suddenly bursts into flames, the folks at Chrysler can just let out a sigh of relief knowing the third-degree burns their vehicle gave you are not their responsibility. Awesome, huh?
News like this doesn't exactly instill the kind of trust GM and Chrysler so desperately need. Why are we supposed to believe that the "new" GM will be run any differently than the old, considering most of the top execs are still in place? At least Chrysler has the advantage of an all-new CEO and top management team.
Multiple state Attorneys General are opposing these provisions in the GM deal:
Attorneys general from Connecticut, Kentucky, Maryland, Minnesota, Missouri, Nebraska, North Dakota and Vermont filed an objection in U.S. Bankruptcy Court in the Southern District of New York Friday.
Rep. Andre Carson is pushing a bill to force GM, Chrysler to cover future and current liability claims:
Four years after a traffic accident nearly killed him, Jeremy Warriner was just days away from his court date. Jeremy was set to argue that a faulty brake fluid container on his 2005 Jeep Wrangler broke and sparked a fire after the vehicle's impact--a fire that left Jeremy with severe burns and forced doctors to amputate both of his legs.
When Chrysler filed bankruptcy in April, Jeremy's mediation date was cancelled and his case has now been grouped with a number of other pending claims--likely never to see any payout due to the agreement struck in the bankruptcy court earlier this month. The court has absolved "New Chrysler," which emerged from bankruptcy, from any liability for future claims related to vehicles made before the creation of the new company.
To help Jeremy and thousands of future crash victims have their day in court, Congressman André Carson has filed the "Jeremy Warriner Consumer Protection Act," a bill that would require the newly-restructured GM and Chrysler to carry liability insurance and force the carmakers to cover claims made against them for any defective products produced by their predecessor company.
Regardless of what happens at the hearing today, the victims and consumer rights advocates won't be going away. There will be rallies this week protesting Chrysler in San Francisco, more on that as I have details.
The Chicago NBC piece is a must see:
The Ad Hoc Committee of Consumer Victims of GM & Chrysler briefly ran an ad when it looked like GM wasn't even going to accept future liability:
Typically, GM was able to pressure the cable monopolist Comcast into pulling the ad off the air and "presto" -- public debate is over. Pulling the ad at GM's request makes perfect business sense for Comcast, since GM promises to spend around $2 billion in taxpayer dollars on advertising this year.
From AutoBlog:
A group called the Ad Hoc Committee of Consumer Victims of GM and Chrysler put together a commercial to run on Comcast throughout the weekend. The group numbers 460 people, 300 of whom are plaintiffs against GM, the rest against Chrysler, all of whom claim catastrophic injuries or the deaths of relations due to defective vehicles from the two companies.
The ad attacks the issue of New GM not being responsible for such liabilities. The claims, said to add up to about $1.25 billion for just the GM parties, would be addressed by the Old GM and lumped in with every other unsecured creditor's claims. That means that if the plaintiffs received anything at all, it wouldn't be much. ...
GM's attorneys called Comcast, and Comcast explained pulling the ad by saying "We have temporarily stopped airing the ad while we conduct a review of the claims it makes." The commercial only asserts a few facts which could be easily checked, and makes a generalization about claims that won't be reported if people know nothing will come of them. Comcast hasn't given any timeline for that review, though.
Here's some an excerpt from the Committee's letter to Comcast:
Yesterday, we were informed that our television advertisement - which correctly explains to consumers that if they are hurt or killed by a defective General Motors vehicle sold before the bankruptcy, that GM will not take responsibility -- was pulled from Comcast at the request of GM. We certainly understand why GM wants to hide this fact from the public - the very same public that bailed GM out with 50 billion taxpayer dollars -- but that is no justification for GM to leverage its taxpayer funded advertising budget to force Comcast to remove a factual ad from the airwaves.
The fact is, GM's bankruptcy plan sheds the company of any responsibility for injury or deaths caused by defective vehicles sold before the bankruptcy and as our ad states, this "throws consumer safety protections out the window." GM has a direct duty to report claims and lawsuit data to the National Highway Transportation Safety Association under the Tread Act. If consumers can't file claims against GM, then there will be no claims and lawsuit data to report. If New GM can not be sued for defects in cars sold by Old GM then there will be far fewer claims and lawsuit data to report. Without that data, NHTSA's ability to monitor and recall vehicles will be severely hampered which puts public safety at risk. In addition, GM's financial incentive to fix defective cars will be lessened if it is no longer responsible for injuries caused by those cars.
...We are disturbed by the fact that GM and Comcast are working together to prevent consumers from hearing the facts, particularly when the facts directly impact public safety. Even more disturbing is the fact that GM is now spending its billions of taxpayer bailout money on preventing taxpayers from learning the truth about what will happen if they are hurt or killed by a defective GM vehicle. Meanwhile Comcast is playing along because GM is going to spend $2 billion more of taxpayer money this year on advertising.
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