By on August 18, 2011


The Detroit News’s David Shepardson reports that GM has requested the dismissal of a lawsuit alleging rear-suspension problems on 2007-8 model-year Impalas, on the grounds that

“New GM did not assume liability for old GM’s design choices, conduct or alleged breaches of liability under the warranty, and its terms expressly preclude money damages,” the response says.

The suit “is trying to saddle new GM with the alleged liability and conduct of old GM.”

The suit alleges that GM issued a service bulletin for police-fleet 2007-8 Impalas, which were eating through rear tires due to faulty spindle rods. In that bulletin, GM instructed its dealers to replace the rods as well as rear tires, where appropriate. But GM argues that police versions are different than civilian models, and has not issued a bulletin for regular-duty Impalas… and now, on top of it all, its arguing that the “new” post-bailout GM “only agreed to warranty obligations of cars assembled before 2009.” As many as 400,000 Impalas could be affected by the spindle rod issue (which GM says is a manufacturing problem, not a design defect), which could cause rear tires to wear out in as few as 6,000 miles. And despite the clear evidence that GM knew about the problem and fixed police-fleet versions, the bailout liability dump defense could just work: at least one lawsuit (regarding OnStar failure) has already been dismissed on the grounds that New GM is not liable for Old GM’s mistakes. The bailout, it seems, is the shafting that just keeps on shafting…

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68 Comments on “GM: Impala Suspension Problems Are “Old GM’s” Liability...”


  • avatar
    quiksilver180

    Just another reason why I wouldn’t buy a GM product. Even if no money is involved, you should take care of your customers. Responsibility.

    • 0 avatar
      philadlj

      True enough…but by GM’s logic they aren’t their customers, they’re Old GM’s.

      The proper defendant in this suit would seem to be MLC (Motors Liquidation Company)…the company “left to settle past liability claims from General Motors Chapter 11 reorganization.”

      Still, if this and other stories like it gain legs in the court of public opinion, it won’t look good for New GM at all.

      • 0 avatar
        VanillaDude

        When the “new” GM took our money, we all became their customers, irregardless of any actual purchase. Instead of buying one of their vehicles, we bought a chance to prevent GM from going under. So, we are all vested.

        If GM wished to no longer support their products before 2009, then they should have at least renamed their products. They not only did not rename the Impala, they produced the vehicle exactly as it had been produced in the same factories. It is the same product.

        This decision was very foolish. Whatever they may have saved in costs in fixing their Impala, they have lost in future sales.

      • 0 avatar
        Z71_Silvy

        When the “new” GM took our money,

        GM didn’t “take” any money.

      • 0 avatar
        quiksilver180

        “it won’t look good for New GM at all.”
        Exactly!

    • 0 avatar
      NormSV650

      Did Yoyota ownersd abandonship when theirV6 sludge up? Did they cry when they had sticking pedals about the loss vehicle value? Or moving floor matts?

      At least an mis-alignment won’t kill people!

      • 0 avatar
        eldard

        A steering wheel popping off could, though.

      • 0 avatar
        golden2husky

        It could if the prematurely failing tire blows out at high speed. GM should man up and cover this. It would send the message that, yup, we learned our lesson and will stand by the product instead of weaseling out on a technicality. By shafting the customer, the message is clear: If it is out of warranty, go F yourself. A beautiful follow up to intake gaskets. Nice work GM. Where is your self respect. This is almost as bad as Porsche screwing people for building engines with a 50K lifespan. I guess that GM is GM, whether new or old: If you can avoid responsibility, do so with impunity. Sad.

  • avatar
    morbo

    But at least only $50 Billion went down that rat hole.

  • avatar
    TEXN3

    Meet the new boss…

  • avatar
    PintoFan

    I would believe them when they say that the problem could be limited to police-fleet models. Those do have different suspension setups, from what a I recall. That would keep it from being a retail consumer issue, which means that it would probably have little traction with the public. In any case, it would probably still be better for GM to foot the bill for the police-fleet replacements.

  • avatar
    tced2

    This is a typical result of a bankruptcy. The new company gets to escape the liabilities of the old. For example, many of the insulation companies went through bankruptcy to escape the asbestos liability. Someone has done the calculation of fixing all the bad suspension parts and that is more than the “cost” of the bad publicity and ill will.

  • avatar
    FleetofWheel

    As any GM apologist can tell you, the New GM is on a new 5 Year Plan.

    Old GM has to deal with any issues arising from prior great leaps forward.

  • avatar
    tallnikita

    Wow, astounding, I had no idea that Obama’s admin precluded this. This changes on thing – I will never consider a GM or Chrysler product. Too bad, I kind of liked some of their crap.

    • 0 avatar
      Pch101

      I had no idea that Obama’s admin precluded this.

      It didn’t. This is basic bankruptcy law. Bankruptcy wipes out prior liabilities, and the new company doesn’t inherit the obligations of the old company. (Duh, it’s a bankruptcy. That’s what bankruptcy is supposed to do.)

      That being said, one would hope that the New GM would cover it, even if it’s not legally obligated to. That’s really the question — after the court has ruled in GM’s favor (and it should, given the nature of bankruptcy law), one would hope that the New GM entity would take care of it just for the sake of goodwill, even though it doesn’t have to.

      • 0 avatar
        FleetofWheel

        It was not done under traditional bankruptcy law but a crony govt/union/corporate slick deal. New GM got to carry forward old GM losses to avoid paying taxes in the future and who knows what else buried in the documents that has yet come to light.

      • 0 avatar
        geeber

        Given the tradition preference of the trial bar for Democrats, if the administration had bent the law in this area during the bankruptcy process, it would have been the other way.

        Namely, the final restructuring would have allowed the “new” GM to remain liable for claims agains the “old” GM.

      • 0 avatar
        geeber

        Given the traditional preference of the trial bar for Democrats, if the administration had bent the law in this area during the bankruptcy process, it would have been the other way.

        Namely, the final restructuring would have allowed the “new” GM to remain liable for claims agains the “old” GM.

      • 0 avatar
        doctor olds

        New GM would not be liable even under a “normal” traditional bankruptcy.
        New GM was allowed to carry forward previous losses in exchange for continuing to fund pension plans. The costs to taxpayers resulting from dumping all UAW and Salary retirees on the PBGC would have been even higher than the lost tax revenues.
        Bankruptcy is intended to create a new entity capable of standing on its own. New GM is certainly doing so.

    • 0 avatar
      mike978

      If it was crap, why were you thinking of buying some? Sounds like you are using this to justify your already made decision not to buy GM or Chrysler products (although what this has to do with Chrysler is beyond me).

      • 0 avatar
        tallnikita

        ’cause of the warranty, actually. i wouldn’t rely on a GM to carry me merrily through 160K miles. not without at least the steering rack at a minimum. new malibu ltz was sweet though.

  • avatar
    benzaholic

    “the shafting that keeps on shafting”

    I believe I like that description.

    Just to rant for a moment, it’s this kind of responsibility avoidance, combined with the old, “We hired them as contractors, not as employees, so everything evil and stupid that they did is not our fault,” bother me. I some times wish I, as a person, could run these avoidance games available to corporations, but I suppose I would have to incorporate myself first.

  • avatar
    OldandSlow

    I would be curious to know what happens if an Impala was built during the waning days of the Old GM and then sold much later during the Epoch of the New GM.

    Also, was this weak link in the rear suspension fixed or upgraded for the 2010 model year?

  • avatar

    That’s 400,000 potential repeat buyers that would never reconsider another GM product. There’s also the huge media backlash that’ll result even if none of the 400k vehicles experience a failure. It’s one thing to cover your tail legally, but at least do some damage control on the PR side of things

    • 0 avatar
      mike978

      I think they have thought this through. As has been mentioned above it could just be police vehicles, so way less than 400,000 (which is the outer limit). Also most of the non police sales are to fleets since the Impala is a well known fleet queen with c.75% of sales going to fleets. So not many retail customers to lose.

    • 0 avatar
      MM

      Impalas are cars not typically driven by the affluent. The average Joe takes a gamble buying a GM product, loses big, and yet again gets the shaft (and the bill). Now stuck with a tire-consuming PoS while depreciation, cliff-like already, goes into freefall.

      If GM has truly done the calculus, they’ll pop $500 vouchers to Impala owners instead of effecting repairs. Meanwhile, the rest of us will continue to cross GM products off our shopping list for another decade. (Our tally: 11 new vehicles since ’96: 5 Honda, 2 Subaru, 2 Ford, 1 Dodge and 1 Toyota. All — even the Dodge — were quite reliable).

      • 0 avatar
        gettysburg

        @MM

        Unless you’re driving a massive amount of miles each year or just get bored with cars quickly, 11 cars in 15 years doesn’t suggest “reliable” to me.

        Since ’87, I’ve had 4 cars(2-VW and 2-Audi) averaging 25k-30K miles a year. And despite what’s generally written about VAG products on this site, they’ve been very reliable.

      • 0 avatar
        MM

        Gettys, not a lot of miles… buying a new car every 18-24 mos was my ‘addiction’ then. I would trade them quickly or give them to relatives. Have since stopped that!

  • avatar
    noxioux

    The only thing the administration did in bailing these guys out is exchange “Too Big to Fail” to “Too Arrogant to be Tolerated”.

    Perhaps GM should be forced to change their name, if they’re so eager to divorce themselves from the ‘old’ products. Perhaps even force them to drop those ‘old’ car names as well. I’d like to see them just try to squeeze by without the brand cache carried by all those Impalas, Malibus, Camaros and Corvettes.

  • avatar
    Volt 230

    Just as GM is starting to make some kind of half-ass comeback, things like this gives their detractors and cynics more ammo against them. Old GM, new GM what about being RESPONSIBLE for what you put out there on the street.

  • avatar
    mikey

    I have a 09 so its not been an issue. My friend has an 07,and he just replaced the tires at 80,000 klms. Another guy I know bought a used 08 and the spindle rods had been replaced under warranty.

    On another note, my daughters 09 Honda CRV eats rear tires. Honda told her its normal wear.

    • 0 avatar
      threeer

      Mikey, all good and true…but even a diehard GM fan would have a hard time defending this position that GM is taking. While it might be correct LEGALLY, it is far from correct in the sense of treating GM owners (old vs new be damned…the cars didn’t change style/design the minute the bailout money hit) with respect. It fairly loudly screams “F-U” to people who put their hard-earned money into a Chevy, and even if Honda (or Toyota…or Hyundai..pick one) says something similar, one would think that if GM wants to put themselves in a better light than their competitors, they wouldn’t turn their back on the very folks that bought their product.

      • 0 avatar
        carguy

        I think what mikey is saying that uneven tire wear is a common problem and most manufactures won’t fix it. I had a Mazda3 that chewed (unevenly) through a set in 10K and Mazda said that was normal. Nissan has also had some problem in this area with the first model year 350Z.

        GM using the “old GM” defense doesn’t sound good but when you look at the substance of the claim, this is how most car makers treat their customers.

      • 0 avatar
        Pch101

        I think what mikey is saying that uneven tire wear is a common problem and most manufactures won’t fix it.

        According to the article, GM admits that it was a design defect. GM’s legal argument is that it isn’t liable because it was a design defect created by the Old GM entity, for which New GM isn’t responsible.

        Of course, it is this sort of stuff that helped to lead to the bankruptcy. Not only was there a design defect, but that same defect ended up in a few hundred thousand cars, instead of being caught early and addressed in an update. Car companies are going to make mistakes, but they need to be proactive about finding them, not just shrug their shoulders and hope that the complaints don’t stick.

    • 0 avatar
      OldandSlow

      What I’ve notice on non-vehicle specific web sites such as this one, the folks who don’t own or haven’t owned a specific brand that is affected by a problem are the ones squeal their outrage the loudest on a probable defect on that brand, in this case one that is part of GM.

      Now, back to the issue specific to the late model Impala, when the editor in chief writes, “As many as 400,000 Impalas could be affected by the spindle rod issue,” the anti-GM bandwagon assumes that each and everyone of those cars are defective.

      Even if they have a late model vehicle, I tell people that don’t do their own work, to find an independent shop that is honest and good. That Honda CR-V seems ready for a independent.

      • 0 avatar
        Bisbonian

        PCH101, according to the article the issue is NOT a design defect but a manufacturing issue.

        In addition they claim that the police version of the Impala uses different parts than the civilian version.

      • 0 avatar
        Pch101

        according to the article the issue is NOT a design defect but a manufacturing issue.

        GM is claiming that it was a design defect.

        “New GM did not assume liability for old GM’s design choices, conduct or alleged breaches of liability under the warranty, and its terms expressly preclude money damages,” the response says.

  • avatar
    Robert.Walter

    This does not bode well for all the Saturn Aura drivers out there who are going to experience the snapping failure of their automatic transmission shift cable…

  • avatar
    nikita

    When did it start that a manufacturer was legally liable for an out-of-warranty repair that does not rise to the level of a safety recall? In the bad old days, after the 90days/4000miles, 24, 36months/kmiles or whatever it was, you were on your own. Excessive tire wear was almost never covered, no matter what. “You probably hit a curb and put it out of alignment”.

  • avatar
    Exfordtech

    Somewhere in a management meeting I’m sure it was noted that there really isn’t a loss of a potential 400k repeat customers because out of those 400k vehicles only x will encounter the problem and of those x a large percentage are fleet customers anyway, so the PR hit is minimal compared to the cost of addressing the defect. I fully understand that bankruptcy law is likely to leave New GM in the clear on this, but common sense would lead one to think that New GM would somehow want to come across as a company that goes above and beyond. Apparently not. I know this is baiting but curious not to see silvywhatever commenting on this.

  • avatar
    eldard

    I see your true colors/ And that’s why I love you/ So don’t be afraid!/

  • avatar
    ajla

    The pastor at my church had a problem like this with his Impala LS. He went through tires in under 9K, and suffered a blowout on the new set from excessive wear on the inside of one of his rear tires. The local dealer service department was expectedly unhelpful.

    He had some adjustable camber bolts put on his car and then took it to an independent alignment shop. I also told him to be sure to rotate the tires every 5K. That seems to have solved the issue.

  • avatar
    ehsteve

    How very un-apple-like.

  • avatar
    geeber

    This is one of those “lose-lose” scenarios from a public relations standpoint. In a lawsuit such as this, GM will naturally throw every argument into its brief as to why the lawsuit should be dismissed. One of the arguments, of course, relates to the bankruptcy filing, and, if precedent is followed, it will likely stick.

    This does not necessarily mean that GM won’t fix Impalas built before 2009. One would hope that GM would agree to this, to at least promote customer goodwill. Given that most of these cars were sold as either police cars or fleet specials, the exposure to retail customers should be minimal, so going the extra mile to make those customers happy shouldn’t break the bank.

    If anything, getting the lawsuit dismissed could ensure that GM’s money is spent actually fixing the problem as opposed to paying plaintiffs’ attorneys fees.

  • avatar
    MarcKyle64

    Just when I start to think the new Camaro looks good, along comes the reminder to not buy one. Thanks GM!

  • avatar
    Jimal

    I hate to sound like a GM apologist, but I don’t see how GM CAN assume the liability for fixing the problem. The soup of the bankruptcy aside, if New GM assumes ANY liabilities of Old GM the assumption then becomes that they assume ALL liabilities of Old GM. The PR hit pales in comparison to the potential exposure to any number of legacy lawsuits.

    On the other side of this (I try to look at both sides if possible), does New GM assume some sort of liability by assuming the IP of Old GM, bankruptcy or no bankruptcy? Did they not continue to produce and sell the exact same car after the bankruptcy? Is there some angle there? Can assuming the production of a defective product make you liable for all problems relating to that defect if you don’t take step to fix the problem before you assume production?

    Even if they don’t the optics aren’t good on this one.

  • avatar
    Thomas Kent

    Just this afternoon, I saw an Impala (civilian model, not police) driving north on I-15 north of Great Falls, MT.

    It had a pronounced negative camber on the right rear wheel. The left rear looked o.k.

  • avatar
    lw

    Me thinks folks are missing the point here. The bailout/bankruptcy was the only way to keep GM intact and functional as an entity.

    The alternative was that most of GM would be completely gone with many parts scattered throughout the industry via liquidation. Certainly that would be worse for GM owners than the current situation.

    Either way, bailout or no bailout, there would be NO LIABILITY for this stuff. Can’t hold new GM liable and you couldn’t hold the folks that picked up parts in a liquidation liable.

    If your a GM owner, your better off because of the bailout.

  • avatar
    lw

    I read back thru the comments and I need to make another point.

    Answer these questions and tell me what the big deal is…

    1) What percentage of new car buyers will ever hear about this?

    2) What percentage of the answer to #1 would understand what this even means?

    3) What percentage of the answer to #2 would then worry that during their ownership of a new GM vehicle, GM would go bankrupt AGAIN and hence not buy a new GM vehicle?

    So how many sales does GM lose because of this? 50? 100? :-)

    • 0 avatar
      lw

      Forgot the last bit..

      Let’s assume that of 100% of the sales that GM loses, they would have lost money on half of them and made money on the other half…

      So let’s call it break even and move on :-)

      I rock at corporate decision making!!!!

      • 0 avatar
        MM

        :) Probably right about 50/50 losing money each transaction…

        … but on the first post, “what percentage of car buyers will even hear about this?… 50, 100?” That sounds like old (new) GMthink.

        Again, GM failed to understand the realities of the market, in this case internet news. The Reuters version of the Impala story ran on Drudge Aug. 19. Drudge is among the single biggest pushers of traffic eyeballs on the web. 500+ then Tweeted it, and more than 300 people took time to comment on the story… nearly all negative to GM and Impala. Take those, plus the 65 here, thousands more on other sites, and if they tell just 2 or 3 friends around the water cooler who are considering a purchase about this… that adds up to real sales. Even at $1K per unit, would’ve been much, much smarter to repair the percentage of the 200,000 or so Impalas made during this time (after all, many owners neglect to bring recalled cars in) and have folks say “GM took care of us…” rather than the opposite.

  • avatar

    we’re honoring warranties and covering some items under policy adjustment. the old/new GM is a cheap excuse to avoid doing the right thing. like I’ve been saying, nothing’s changed in the marketing department.

  • avatar
    Tommy Boy

    1) That it effects up to 400,000 manufactured units of the shafts — whether internally made or from a supplier — doesn’t speak well of “GM quality control” (I of course recognize that that phrase is an oxymoron).

    2) In the early 1980′s I was a service advisor at an AMC-Jeep dual. For a while AMC was purchasing GM “Iron Duke” 4 cylinder engines (a/k/a the Vega check the oil every time you gas up engine). Customers were complaining of piston slap on startup in the morning. AMC sent us a GM Service Bulletin saying that it was a recognized complaint but that piston slap was considered normal, hence no repairs under warranty.

    Some years later I read that the machinery for manufacturing the blocks was out of calibration, that this caused piston slap in the production motors, but that GM didn’t want to incur the expense of shutting the line down to fix the manufacturing equipment.

    Obviously the world of GM hasn’t changed much in the intervening 30 years, other than we taxpayers were forced to inject billions of dollars down that rathole that should have just been allowed to go into well-deserved extinction.

  • avatar
    Educator(of teachers)Dan

    Let me give you some “potential customer” perspective. About a year from now I’m going to be car shopping. I could go for new or used, I don’t know yet, haven’t made a firm decision. But high on my new car list are the “big sedans” of the “former” Big 3. (Why? Well I hate SUVs and CUVs. Minivans still seem sort of soul sucking. I would like to give the American manufactures a crack at my business. So anyway…)

    For me that means I go test drive a Dodge Charger, Ford Taurus, and Chevrolet Impala (last remaining W-body – new 3.6V6 6-speed). Now I know that this recall affects (possibly) used Impalas but it still gives me pause. Why? Well I don’t expect anything built by the hand of man to be perfect (too many variables) BUT I do expect companies to fess up and fix things when the design or manufacturing process is faulty. Honestly GM I don’t care how many recalls or defects it has coming off the assembly line, just fess up and fix it! That’s how you get and keep customers.

  • avatar
    Corky Boyd

    I understand normal bankruptcy law, but this was no normal bankruptcy. The federal government gave assurances that New GM would assume responsiblity for Old GM’s warranties. This is President Obama’s statement of March 30, 2009.

    “Let me say this as plainly as I can. If you buy a car from Chrysler or General Motors, you will be able to get your car serviced and repaired just like always,” Obama said in a speech. “Your warranty will be safe. In fact, it will be safer than it has ever been. Because starting today, the United States will stand behind your warranty.”

    If GM won’t honor the Old GM warranty, the federal government will. This may be GM’s game, to dump the problem on the taxpayers. Either way the purchaser or holder of the warranty should be able to collect. It may require the services of a lawyer to do so. But Obama’s statement is unequivocal.

    • 0 avatar
      doctor olds

      The issue is not about honoring warranty. The Impalas involved are fully covered to the extent of the warranties provided when they were purchased. I will wager dealers and field people are handling any warranty concerns fairly, each sharing the objective of satisfying customers to increase repurchase intention.

      The issue is a class action lawsuit alleging that GM should pay a sum to every Impala owner in the class and in the process enrich the trial lawyers, who would likely keep over half of any settlement.

  • avatar
    mikey

    @ doctor olds…According to my local dealer. GM will honor all warranty claims concerning premature tire wear.

  • avatar

    If I follow the logic here about bankruptcy wiping out obligations, then the correct path for car companies in the new millenium is to declare bankruptcy every 5 or 6 years, take a massive infusion of tax dollars, and “re-emerge” as the same company minus the pesky warranties.

    Does this work for UAW pension obligations too?

    • 0 avatar
      doctor olds

      @mikey- thanks for comment. I expect, and hope that is the case everywhere.

      @DaddyOfPayton- New GM is honoring ALL warranties AND continuing to fund the UAW pension obligations.

      No doubt, the management did not choose and would rather NOT have been forced into bankruptcy. They had no other options, nor did they get to choose the conditions imposed by the Obama administration’s Auto Task Force.

  • avatar
    iantm

    Wife had an 04 Chevy Malibu that turned into an absolute lemon. When we caught a whiff of the impending bankruptcy in the spring of 09, we dumped it and replaced it with the 06 VW New Beetle Convertible she wanted so bad. Oddly enough, the VW has proven rock solid compared to the Malibu.

  • avatar
    CJinSD

    This will keep happening to car buyers for as long as there are car buyers willing to buy GM products. And when there aren’t enough of them, the process will be prolonged by corrupt politicians.

    • 0 avatar
      ZoomZoom

      Absolutely true.

      Government Motors should never have been bailed out. It was morally wrong to take my tax money without my permission and do this.

      A traditional bankruptcy would have been the moral and correct thing to do.


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