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.

The automaker and the government task force were apparently unprepared for the vigorous opposition mounted by the state attorneys general, consumer advocates, and victims of GM defects and their attorneys. GM had hoped to skip out on an estimated millions of dollars in pending claims and any future death and injury claims involving GM vehicles built pre-bankruptcy. The company was in murky legal territory in its quest to extinguish future claims – which may explain its capitulation on that point.

It’s still not immediately clear what will happen to the current claims.

“The bottom line is: liability shouldn’t be based on when you bought the car,” says SRS President Sean Kane, who has been among those advocating for a change to the bankruptcy terms. “I don’t believe there’s a lot of tolerance for that from the public.  It certainly isn’t the way you build brand equity going forward.”

GM’s walk-back does nothing for the victims of Chysler’s defective products. But   Congressman Andre Carson (IN) has just introduced the Jeremy Warriner Consumer Protection bill, which would require GM and Chrysler to purchase insurance for past, current and future liability claims.  And, the team that brought you this compromise is likely to keep applying the pressure, until both automakers take responsibility for defects.

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