August 24, 2011
GM in Class Action Lawsuit Over Chevrolet Impala – Obama Backed Warranty
Original article written by Net Advisor™
DETROIT, MICHIGAN. General Motors (NYSE: GM) is being sued by Donna Trusky from Pennsylvania who asserts that her Chevy Impala ‘suffered from faulty rear spindle rods, causing her rear tires to wear out after just 6,000 miles.” The suit claims that GM fixed this problem on police vehicles but not for the same issue on consumer vehicles (Source: Reuters).
GM spokesman Alan Adler confirmed that, “GM issued a service bulletin for (Chevy Impala) police cars from the 2007 and 2008 model years because of rear suspension problems. But he said the company wouldn’t comment further.”
— Source: Boston.com
GM is attempting to dismiss the lawsuit arguing that the car was purchased prior to GM’s 2009 bankruptcy (and subsequent Obama takeover), that under bankruptcy laws, GM is no longer liable (Source: ChicagoTribune).
According to automobilemag.com, “Nearly 55 other owners have complained to the National Highway Traffic Safety Administration about the same issue.”
Detroit News reported, Trusky’s “GM dealer replaced the tires and provided an alignment, but didn’t disclose the spindle rod issue, she said.” Further,
“In its July 2008 bulletin, GM told its dealers to replace the rods, align the rear wheels and, if necessary, replace the rear tires. Police agencies that had replaced rear tires themselves could seek reimbursement for a year.”
— Source: Detroit News
Generally speaking it is possible for the debtor to discharge some to all liability prior to a bankruptcy filing (Source: U.S. Courts.gov). However, there are exceptions such as under 11 U.S.C. § 523(a) where certain situations cannot be discharged in bankruptcy.
As part of the 2009 GM bankruptcy agreement, the auto manufacturer agreed to accept responsibility for “future product liability claims.”
GM argues (story link gone) they are not liable in this case because, “New GM did not assume liability for old GM’s design choices, conduct or alleged breaches of liability under the warranty, and its terms expressly preclude money damages.”
“Let me say this as plainly as I can. If you buy a car from Chrysler or General Motors, you will be able to get your car serviced and repaired just like always,” Obama said in a speech. “Your warranty will be safe. In fact, it will be safer than it has ever been. Because starting today, the United States will stand behind your warranty.”
— President Obama Speech (03-30-2009). Source: Auto Week (Local PDF, highlight speech added)
Obama Video Speech – Guaranteeing GM/ Chrysler vehicles @0:20 to 0:40
Obama Speech Video: Direct Link
It appears that regardless of the outcome, the President has made an explicit guarantee on behalf of government where tax payers might get stuck with the bill fixing “old GM” and “old Chrysler” vehicles.
Separately, GM is recalling (2011-08-12 story link gone) “11,905 2012 Chevrolet Impalas in the United States and Canada to inspect for proper installation of the power steering hose, which, if misrouted, could be damaged and spray fluid onto hot parts of the engine creating potential for a fire.”
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Shhhhhh! (Not Everyone is Paying Back TARP)
Did GM Repay Its Debts? A Lesson in Semantics
Credits:
Vehicle image: public domain.
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