Chrysler: So Long and Thanks for All the Lawsuits

Edward Niedermeyer
by Edward Niedermeyer

Chalk up another reason why Chrysler should have been allowed to fail. The New York Times reports that if Chrysler’s restructuring is approved it would allow the automaker to evade liability for injury-causing defects on its vehicles. An Automotive News [sub] write-up of Chrysler’s creditors reveals that the Ad Hoc Committee of Consumer-Victims of Chrysler LLC consists of 150 members seeking an estimated $650 million in damages allegedly caused by Chrysler vehicle defects. Under current reorganization plans, those creditors would be left with no recourse after Fiat assumes “good Chrysler’s” assets.

If GM follows Chrysler’s example (which one law professor calls “bizarre”) even more consumer lawsuits could be shelved. A coalition of consumer advocates including Public Citizen, the Center for Auto Safety, Consumer Action, Consumers for Auto Reliability and Safety and the National Association of Consumer Advocates have petitioned the court to transfer legal liability to the new Chrysler. Since Chrysler is already walking away from Lemon Law protections (bouncing checks all the way), it’s probably safe to assume that the Pentastar will be reborn free from lawsuit claims. Because when has the bailout ever been about the best interests of the consumer?

Edward Niedermeyer
Edward Niedermeyer

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  • Ralph SS Ralph SS on May 20, 2009

    I can see it now. Fords new advertising campaign: "Buy a Ford. Hey! If something goes wrong you can still sue us!"

  • Carlos.negros Carlos.negros on May 20, 2009

    The practice of disposing of liabilities is nothing new. When Monsanto was being sued by workers for contamination with carcinogens, they split out the company into two parts. The "good" part was Monsanto and included their seed products. The "bad" part made chemicals and was given the name Solutia. Solutia had all the liabilities. After the lawsuits hit, they declared bankruptcy. In the end, it was the people who were hurt by their products that paid the price.

  • TireGuy TireGuy on May 20, 2009
    Because when has the bailout ever been about the best interests of the consumer? Since when have class Actions and frivolous law suits in the US been in the real interest of the consumer? They cost every single American a lot of money making products more expensive, making lawyers rich, as well as some of the plaintiffs. This system is unreasonable any way. No tears here.
  • Flashpoint Flashpoint on May 21, 2009

    AS A 300 owner, this hurts me most. I never would have guessed Chrysler would be in this shape years ago when I bought my car. I think I'm gonna have to trade it in for a new E class.

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