The writing was on the wall for the last month, at least. Hertz Global Holdings, Inc. has filed for Chapter 11 bankruptcy protection after the coronavirus pandemic sent rentals — and revenue — crashing, forcing the debt-laden company into a corner that’s proven near impossible to escape from.
One of the world’s largest car rental agencies, Hertz laid off more than 12,000 workers in March and furloughed another 4,000 before scrapping 90 percent of the new car acquisitions it had on the books for 2020. While that might have stopped some of the bleeding, the core issue remains: few people are travelling, and even fewer are renting cars.
Remember all of those bankruptcy protections sought by General Motors that were made against any and all future lawsuits linked to ignition-related accidents and fatalities that occurred prior to the automaker’s exit from said bankruptcy in July 2009? Guess how much it would owe if the shield collapsed?
Reuters reports the lawsuits filed against General Motors over its decade-plus handling of the ignition switched linked to 13 fatalities and 54 accidents will all be reviewed by U.S. District Judge Jesse Furman in the Southern District of New York, as ruled Monday by the U.S. Judicial Panel on Multidistrict Litigation. The panel determined New York to be the appropriate venue for the hearings based upon the court’s handling of the 2009 bankruptcy that allowed the automaker to shed its former self, liabilities and all. The lawsuits to be heard by the bankruptcy judge involve economic damages, suits GM wants the judge to determine if they are blocked by the liability protections established upon its exit from bankruptcy.
In an interview with New York Magazine, consumer advocate Ralph Nader said General Motors CEO Mary Barra has “a good opportunity” to make serious changes to the corporate cost culture that gave rise to the 2014 ignition recall crisis. Suggestions include appointing an independent ombudsman with a direct line to the president and CEO for engineers who need to speak out about possible problems without having to go through “cost-concerned bosses,” as well as holding accountable all involved in any cover-up of any potential product issues.
Nader also believes the federal government should go after personal prosecutions of those tied to the current recall, but adds that unless the media keeps putting the pressure on the Justice Department to do so, the only thing that could come is a settlement in the vein of the one reached between the agency and Toyota earlier this month.