In addition to pledging to do business differently in the wake of a 1.6-million vehicle recall over a faulty ignition switch and the decade-long delay behind the recall, post-bankruptcy General Motors may find itself protected by its former self before the court of law for any accidents resulting from the switch.
Automotive News reports that under the terms of reorganization that helped the current structure at GM emerge from bankruptcy in July 2009, the automaker would only be responsible for accidents post-bankruptcy, while accidents before the aforementioned point in time would need to seek compensation from “old GM” in bankruptcy court.
However, the original plan would have shut the door on liability for any product made pre-bankruptcy — including the 1.6 million vehicles under the recall — had not GM bowed to pressure from critics and consumer advocates.
The division has proven successful thus far for “new GM,” as lawsuits made for pre-2009 claims against the automaker have failed thus far, as spokesman Greg Martin acknowledged:
It is true that new GM did not assume liability for claims arising from incidents or accidents occurring prior to July 2009. Our principle throughout this process has been to the put the customer first, and that will continue to guide us.
With 31 known accidents and 13 deaths tied to the faulty ignition switch — discovered in 2004 prior to the introduction of the Chevrolet Cobalt, but only corrected beginning last month — the more that fall under “old GM,” the more potential for savings for “new GM” in litigation that could come as a result; the automaker paid $601 million in 2012 for liability claims, according to a filing with the Securities and Exchange Commission.