"New" GM Only Responsible For Post-Bankruptcy Ignition-Related Accidents

Cameron Aubernon
by Cameron Aubernon
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new gm only responsible for post bankruptcy ignition related accidents

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.

Cameron Aubernon
Cameron Aubernon

Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.

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  • DenverMike DenverMike on Mar 11, 2014

    Legal liability or no, GM needs to make it right with these victims and or families. Otherwise GM is just putting a pox on themselves. The can't keep screwing over Americans just because they can. It's too competitive out there.

  • CapVandal CapVandal on Mar 11, 2014

    There is definitely repetitional risk with this. Marry Berra is smart to get this behind her. Right now, she can blame the prior guys. In a year or two, she will own it. Getting in front of it to get it behind her and GM is also smart because it wasn't going to go away -- so why not appear proactive? Or be proactive (don't want to sound overly cynical here). The first rule of management after getting control is to 'clear the decks' of existing problems and blame the last guy. I'm sure there are other things she would like to clear up, but GM can't afford them. After 6 months or a year, she will own the problems. You only get a brief honeymoon period to blame the last guys. This was one of Jeff Imemelt's problems @ GE. Jack Welsh was taking victory laps and just had a new book out. Immelt wasn't in a position to seriously miss earnings, fix the obvious problems, and blame Jack. Immelt became CEO on September 10, 2001. If there was ever a time to throw in the kitchen sink (on the financials) -- it was then. Jeff still reminds people of his start date.

  • Theflyersfan Some of my extended family have lived in Orange County/Anaheim area since WW2 ended. They were in Anaheim before Disney and when there were actually orange groves. When I lived out there, I battled up from Ventura County down there a few times a month for dinner and ballgames and it was always interesting to hear from the older members about what things were like out there before it all really blew up. And how starting in the 1950s, they could no longer see the mountains anywhere and the sky was frequently this sick brownish haze. And then starting in the late 1990s, when things really started to clean up, they said there were now more days when they could see the mountains again compared to not, and it was really only the Santa Ana winds that brought in the gunk from the Inland Empire into the basin. There's still a long way to go - during the pandemic, it was wild seeing videos of how clean the air got when so many people were working from home, but it shows that even with all of the heavy industry there, it can be done. I know everyone is all over the map when it comes to climate change and causes or if it's happening, but regardless of views on that, I think we can all agree that burning less gasoline and diesel helps everyone breathe a bit easier when we don't have as many smog alert days.
  • Fred It's always someone else's fault. Now where is my bonus?
  • Canam23 I moved to Los Angeles in 1968 and half the time the air was unbreathable. It is 100% better now thanks to the work of the AQMD. If you remember, when the first pollution controls were mandated in the 70's, Detroit said it was impossible to meet them. The Japanese just started working on the problem and just did it. All the tougher laws to mandate air pollution have resulted in not just cleaner air for our children, but also much more efficient engines in our vehicles. So Stellantis, I'm not buying it.
  • Theflyersfan Nope. Has nothing to do with Gladiator sales falling off of a cliff and having 5-figure discounts. Or...YTD 2023 compared to last year:Compass +7%Wrangler -14%Gladiator -31%Cherokee -25%Grand Cherokee +6%Renegade -35%Wagoneer -31%Grand Wagoneer: -14%End of 3Q 2023: 490,106 Jeeps soldEnd of 3Q 2022: 541,297 Jeeps sold490K is still a decent number of expensive SUVs sold, especially Grand Cherokees, but it's still a decline. And people want the 4xe models, so that could reverse the trend if they crank more of them out. But let's blame the government for everything. It'll lead a news cycle on any red hat network.
  • VoGhost California is the reason Dodge and Chrysler were starved of new models for the past decade. OK...