Who Are the Victims of Takata’s Fraud?

For more than a decade, airbag supplier Takata manufactured what turned out to be ticking time bombs – airbag inflators with a volatile propellant called Phased-Stabilized Ammonium Nitrate (PSAN) – that were placed in vehicles worldwide by the hundreds of millions.

“I don’t where I got the nerve, but it sure felt good.”

So says Christina Catalano, after her brief confrontation with Chrysler CEO Sergio Marcchione at a dinner yesterday night sponsored by Automotive News World Congress, as part of the North America International Auto Show in Detroit.

Catalano is the daughter of Linda Catalano who died on August 3, 2008.  The 55-year-old mother and grandmother had completed a garage sale and had left her home several blocks away to collect the remaining sale signs along the road.  She evidently stopped the vehicle along the roadway to pick up a sign.  She placed her vehicle into what she must have believed to be Park and opened the door and stepped out of the Chrysler Mini-Van to pick up her signs, with the engine running and the driver’s side door open.  The vehicle then “self-shifted” into reverse, knocking Catalano to the ground and dragging her underneath the left front tire, where it pinned her.

Chrysler Accepts Future Liability; Current Claimants Still have no Recourse

Two-and-a-half months after Chrysler took a pass on accepting responsibility for injuries and deaths caused by its defective products via an expedited bankruptcy plan, the automaker announced that it was going to accept future liability claims for vehicles made by the old company.

It would be heartwarming to imagine a corporate come-to-Jesus moment, but cooler calculations apparently prompted this new tack, including increased pressure from injury victims, Congress, and the threat of state-by-state litigation into the legality of wiping away future claimant’s rights.

GM / Chrysler Bankruptcies: What’s In What’s Out

The terms of the Chrysler and GM bankruptcies have created arbitrary and artificial classes of claimants. Here are the current parameters for liability:

Chrysler: Date of Bankruptcy Exit: June 10

Chrysler, GM Bankruptcies Concluded, Defect Victims Cheated

WASHINGTON, D.C. – The Obama administration’s drive-by bankruptcies have left the victims of defect-related crashes to eat their dust, but consumer advocates are turning to other strategies to force Chrysler and General Motors to do the right thing.

Consumers for Auto Reliability and Safety, along with Consumer Action, Center for Auto Safety, Center for Justice & Democracy, and National Consumers League, have petitioned the Federal Trade Commission to require labels informing buyers of a used Chrysler’s unique liabilities. The label they’ve suggested goes like this:

“WARNING    This vehicle was produced prior to the date when the Chrysler bankruptcy was approved. If you buy this vehicle and are injured or killed, even if your injuries were caused by the manufacturer, you or your survivors will not be able to recover your losses by taking action against the manufacturer. If your passengers are injured or killed, even if their injuries were caused by the manufacturer, they and their survivors will not be able to recover their losses by taking action against the manufacturer.”

Stick a Fork in It

Barring a successful appeal by some crash victims, the General Motors bankruptcy is a done deal. Over the Independence Day holiday weekend, Judge Robert E. Gerber of the federal bankruptcy court in Manhattan declared independence for General Motors from all previous liabilities. On Sunday, Gerber approved the sale of the automaker’s assets to a consortium consisting of the governments of the U.S. and Canada and a health trust owned by the United Auto Workers union. The parties were racing to beat the Obama administration’s clock of a bankruptcy and sale by Friday. The deal is expected to close on Thursday, after the judge’s four-day stay runs out.

Caveat Emptor

Pity the poor used Chrysler dealer trying to peddle some pre-bankruptcy bargain with this sticker:

“WARNING    This vehicle was produced prior to the date when the Chrysler bankruptcy was approved. If you buy this vehicle and are injured or killed, even if your injuries were caused by the manufacturer, you or your survivors will not be able to recover your losses by taking action against the manufacturer. If your passengers are injured or killed, even if their injuries were caused by the manufacturer, they and their survivors will not be able to recover their losses by taking action against the manufacturer.”

GM's End Run Starts to Falter

Opponents of Chrysler and General Motors’ bid to play the get-out-of-liability-free card scored a partial victory Friday. GM agreed to amend the terms of its bankruptcy to assume liability for future death and injury claims. The deal was reportedly hammered out late Friday between the Treasury’s auto task force, GM and more than a dozen states attorneys general.

Why the Problems Won’t Go Away When the Old Chrysler and GM Do

About 3,400 individuals will die or be injured in a General Motors or Chrysler vehicle due to an automotive defect in the companies’ first year post-bankruptcy, according to a new analysis conducted by Safety Research & Strategies

SRS has released its report, Public Safety at Risk: Bankruptcies Leave Legacy of Defects, Injuries and Deaths as part of its ongoing efforts to highlight the plight of the victims of the Chrysler and GM bankruptcies. Under the terms of each automaker’s transition from their old, debt-burdened incarnations to their liability-free future entities, hundreds of pending death and injury claims will be eliminated. But the latent – and in some cases, well-known, but never resolved – automotive defects will continue to manifest themselves in the 40 million GM and Chrysler vehicles built before Chapter 11, which remain in the U.S. fleet.

States Attorneys General File Objections to GM Bankruptcies

The states have begun to clamor for their rights in the dissolution of the old General Motors, filing a joint objection to the bankruptcy provision allowing the automaker to eliminate tort claims.

Following the path set by the Chrysler bankruptcy and sale to Fiat, GM has sought protection from liability claims for deaths and injuries that occur in vehicles manufactured before the bankruptcy. Eight states attorneys general, from Connecticut, Kentucky, Maryland, Minnesota, Missouri, Nebraska, North Dakota and Vermont filed an objection with the U.S. Bankruptcy Court in New York on Friday. Illinois, California, Kansas and Ohio have joined the objections.

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