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.”

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.

Senate Commerce Committee Press GM and Chrysler

A bipartisan coalition of the 20 U.S. Senators comprising the Committee on Commerce, Science and Transportation has written to Chrysler and General Motors urging the ailing automakers to back off of some of the more Darwinian features of their bankruptcies. Separate, but essentially identical, letters to James Press of Chrysler LLC and GM CEO Fritz Henderson raised questions about the fates of terminated dealerships and the technicians trained specifically to service their products. The letters also defended consumers, demanding answers to the companies' provisions for providing access to rural customers and to their planned walk-away from the victims of defects.

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