GM leaves plaintiffs in the dust

posted at 11:12 am on July 8, 2009 by Ed Morrissey

The Obama administration used the government-managed bankruptcies of GM and Chrysler to boost a key political ally in the unions, but may have left another at the curb — trial lawyers.  ABC News looks at the effect that the bankruptcies have on those injured or killed due to defects in GM and Chrysler vehicles.  Thanks to the Obama White House, they can only get compensation from the defunct carcasses of both companies, which have no assets left at all:

The 53-year-old Missouri man is one of at least 400 people suing for damages after being hurt or having family members killed in a General Motors or Chrysler vehicle. He is also one of hundreds who, thanks to the government-backed bankruptcy restructuring of GM and Chrysler, don’t know if they’ll ever get their day in court.

“I never thought they would throw us to the side like we weren’t anything,” Cole said.

The order issued late Sunday by the judge in the General Motors bankruptcy case that allowed “old” GM to sell its assets to a “new” GM — part of GM’s efforts to reinvent itself as a lean and competitive company — also allowed the new company to free itself of injury and wrongful death claims filed before bankruptcy proceedings began. An effort to appeal the ruling met with a setback late last night after a judge ruled that such an appeal could not go directly to the 2nd Circuit Court of Appeals — which could result in a speedier resolution — but must be brought before a district court instead.

Under the terms now approved for GM’s bankruptcy restructuring, consumers can still sue the old company, but lawyers for the accident victims say they expect that the “old GM” — the company charged with liquidating any assets not inherited by the new GM — won’t have the cash needed to meet their claims.

Of course they won’t; that’s the entire point.  The government rescued the unions by pumping tens of billions of dollars into the automakers which taxpayers will never recover.  They forced investors in GM and Chrysler either to accept much less compensation than the unions despite holding more debt and having senior positions on the books, costing them billions they won’t recover.  Now Obama has told those who suffered serious injuries or the families of those who died in allegedly defective vehicles that they’re going to have to sacrifice their right to their day in court, too.

The only people not sacrificing here seems to be the unions themselves, and the Obama administration.

And if you think GM got a good deal, take a look at Chrysler:

The bankruptcy proceedings for fellow struggling automaker Chrysler, which concluded June 10, provided that company the same benefit and more: In Chrysler’s case, the judge ruled that the car company that emerged from bankruptcy is off the hook for liability claims related to any Chrysler car manufactured before the bankruptcy proceedings, even if the claims are filed after the bankruptcy.

That means that someone injured in a Chrysler car next week, for instance, couldn’t sue the company if they bought their car before June.

GM tried to get this deal, but lost on that point.   However, for all practical purposes, they have it anyway.  Those suits will get filed against the rump GM that the bankruptcy creates, which will have nothing but debt up to its ears.  Even if people sue and win, they’ll get nothing but a junk bond in return.

Quick — let’s ask the White House if they’re going to push through tort reform, too.  After all, that would be fairer to plaintiffs than just declaring entire companies immune from accountability for their products.


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Comment pages: 1 2

Interestingly enough, there are still ads for GM cars on talk radio and even during Hannity’s show on Fox! Who is paying for those ads–the Government?

What about those ads for low-rate mortgages from Ditech.com, which is a division of GMAC Financing? Are people who borrow from Ditech.com actually borrowing taxpayer money to bail out the UAW with interest? And whatever private banks are still solvent because they DIDN’T make subprime loans have to compete with this?

Somebody should blow the whistle on this, but then Obama would probably fire the Inspector General…

Steve Z on July 8, 2009 at 12:31 PM

Yet another company to steer clear from.

Thanks for the heads up Steve.

Chaz706 on July 8, 2009 at 2:52 PM

I have always bought GM cars but never again.These people need to learn that we the American people will not take this with out a fight.Ford has a chance to become #1 if they give us what we want to drive.

thmcbb on July 8, 2009 at 2:56 PM

Good point about OnStar and its ramifications. I happen to be a metallurgical engineer, member of SAE (Society of Automotive Engineers), and a car nut. I too hate OnStar. Listen closely to their radio ads where they play the actual distress calls. The OnStar operator knows the speed of the OnStar-equipped vehicle at the time of the crash. There is a true story out there about a guy who bought a Chevy Malibu Maxx and decided to race it in an autocross (rubber cones in a large parking lot). Halfway thru his run, OnStar calls him and inquires if he is all right from the accident. He says, “What accident?”….OnStar knew his cornering and braking G-forces. Good luck on HIS next warranty claim.

Additionally, every (GM, Ford, Chrysler) vehicle since about 2002 has integrated into its computer an Event Data Recorder, which records and stores vehicle operating information on a revolving basis for the last few previous minutes of operation. The mechanical and electrical engineers in SAE love this stuff, BUT……this information is admissible in a court of law and can be subpoenaed against the car owner’s will in violation of the 4th Amendment protections against search and seizure. A select few foreign manufacturers (Hyundai, Mercedes, and Porsche for sure, maybe others) refuse to install them. Rumor has it that on many GM vehicles, it’s located behind the radio, and is a separate “black box” and the vehicle WILL function if it’s removed. Feel free to experiment at will.

As we speak, the Brits are experimenting with a fleet of government vehicles that have GPS connected to the throttle. I am sure that the “lives-saved data” they get from this one will make their case for speed control for everyone. Look at it on Autoweek.com.

My newest vehicle is a 2000 Plymouth Breeze, normal commuting vehicle is a 1979 Ford F150 (66,000 orig. miles), and I really love my 1988 GMC Suburban. Not real interested in new-car payments to union interests, or in driving an “electronic snitch”.

SteelGuy on July 8, 2009 at 2:59 PM

We need a forum to organize a national boycott of GM, Chrysler (buy Ford products only) and their finacial affiliates. The free-market-system, and therefore the power of the purse, must employed to destroy the forces of statism/socialism running rampant over our constitution.

Anyone have any ideas how to set such an effort in motion?

Archimedes on July 8, 2009 at 3:21 PM

I was driving my daughters new Pontiac G6 and On Star came on and asked if I’d roll down the windows and refrain from doing that after I’ve entered the car.

Jeff from WI on July 8, 2009 at 3:30 PM

Considering GM is a defendant in tens of thousands of current asbestos lawsuits (for the friction parts)… oh my is this going to be interesting to see who gets custody (so to speak) of the GL insurance and whatever self-insured retention…

LTC John on July 8, 2009 at 3:32 PM

SteelGuy on July 8, 2009 at 2:59 PM

Thank you very much for your post, SteelGuy, I really appreciate it!

I’m paranoid about privacy to the point of refusing to have my mobile phone on when travelling, and I refuse to have one of those e-tags installed, as well.

OldEnglish on July 8, 2009 at 8:26 PM

I read recently that retirees were going to be “owned” by Bad GM. Will it have any source of income, or will it be made up entirely of debt, lawsuits and other crap they want to get rid of?

Some dear friends I used to work with voted for Uhhhhbama because he would “protect the unions”. Wow, that worked out well for us all, huh?

darwin-t on July 8, 2009 at 9:14 PM

Maybe these people should go sue the unions, I mean they put the cars together so if its a production flaw they should also be held accountable.

Rbastid on July 8, 2009 at 11:41 PM

So sue the workers and their union, hm?

herself on July 9, 2009 at 4:39 AM

Comment pages: 1 2