Chrysler and GM Bankruptcy -- Consumers Are Left Out

July 3, 2009

The current Chrysler and GM bankruptcy plan eliminates consumer safety protections and shifts the safety burden to individual drivers, state governments and the federal government.

July 03, 2009 /24-7PressRelease/ -- Chrysler & GM Bankruptcy -- Consumers Are Left Out

Article provided by Langdon & Emison
Visit us at http://www.langdonemison.com/ Quick Bankruptcy Compromises Safety

In the rush for a "quick and efficient" bankruptcy, these General Motors, Chrysler and the U.S. Treasury compromised the safety of every driver on the road. The current plan eliminates consumer safety protections and shifts the safety burden from GM and Chrysler to individual drivers, state governments and the federal government.

Chrysler and GM -- with prodding from the U.S. Treasury Department -- have each filed for bankruptcy protection, selling off their "good" assets to a "New Chrysler" and a "New GM" and leaving consumers injured or killed by defective vehicles with nothing to recover from the Old Companies. Under the bankruptcy, GM and Chrysler will repair vehicle defects under warranty claims and federal recalls, but refuse any responsibility to the actual people who drive GM and Chrysler vehicles.

Consider this: Customer A purchased a Chrysler Vehicle "X" on Tuesday, June 9, 2009 (the day before the Chrysler bankruptcy sale closed). Customer B purchased an identical Chrysler Vehicle "X" on Wednesday, June 10, 2009 (after the Chrysler bankruptcy sale closed). Customers A and B are involved in separate (but identical) collisions due to a safety defect in Chrysler Vehicle "X" that is the subject of a recall. Customers A and B suffer identical injuries and loss resulting from the collisions. New Chrysler would assume responsibility for:

- Recall and warranty work for Customer A's defective and dangerous Chrysler Vehicle "X";

- Recall and warranty work for Customer B's defective and dangerous Chrysler Vehicle "X";

- Customer B's injuries and damages arising out of the collision caused by the safety defect in the Chrysler Vehicle "X".

However, Chrysler would completely disclaim any responsibility for Customer's A's injuries and damages simply because Customer A purchased his Chrysler Vehicle "X" one day earlier than did Customer B.

If New Chrysler and New GM have de facto immunity from tort liability, who then bears the burden of Customer A's injuries? If Customer A has sufficient assets (millions of dollars), then Customer A must bear the burden of Chrysler's defective design on his own. In a more likely scenario, Customer A must first bankrupt himself and then it will fall to the state in which Customer A lives (through its Medicaid system) or the federal government (through Medicare or Social Security Disability) to bear the costs of Customer A's damages. Thus, Chrysler has radically reduced Customer A's quality of life and effectively shifted the costs of Chrysler's defective design to (a) its consumers; (b) state governments; or (c) the federal government.

100 Million "Ticking Time Bombs" On The Road

American families are driving Chrysler and GM vehicles that may have defects that are yet currently unknown. Estimates put 66 million GM vehicles and 33 million Chrysler vehicles on the road today. (Statement of John McEleney, Chairman of the National Auto Dealers Assocation [NADA] to Senate Commerce, Science, and Transportation Committee, June 4, 2009; found at http://www.tmcnet.com/usubmit/2009/06/04/4212579.htm.) The National Highway Transportation Safety Administration has determined that GM and Chrysler vehicles account for nearly half of all automotive death and injury claims. Each of these nearly 100 million vehicles is a potential ticking time bomb for owners of these vehicles and the public with which they share the road.

Take Action Now

What can be done to protect consumer injured or killed by defective Chrysler and GM vehicles?

(1) New Chrysler and New GM could voluntarily accept responsibility for tort claims arising from all Chrysler and GM vehicles, as demanded by Congress on June 9, 2009.

(2) The purchase agreements for the sale of the companies could be amended to remove the provisions which immunize the New Companies from tort liability.

(3) The New Companies could leave funds behind in the Old Companies specifically earmarked for injured claimants.

(4) The New Companies could leave funds behind in the Old Companies specifically earmarked for the purchase of insurance to cover the claims of injured claimants.

If you are concerned that GM and Chrysler are being given complete immunity for their defective and dangerous vehicles, you should contact your Members of Congress, particularly those serving on the Judiciary and Commerce committees. Let your representatives know that GM and Chrysler should take responsibility for their products.

Article provided by Langdon & Emison
Visit us at http://www.langdonemison.com/ Quick Bankruptcy Compromises Safety

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