GM says bankruptcy excuses it from Impala repairs

[Dave]

It's issues like this that would make me think twice about purchasing a GM (Government Motors) vehicle. The ethical thing to do would be to fix the cars, regardless of when they were bought... then again, does any company really do the ethical thing these days?

 

* New GM said not responsible to fix Impala made by old GM

 

* Suspension problem said to cause excessive tire wear

By Jonathan Stempel

NEW YORK, Aug 19 (Reuters) - General Motors Co (GM.N) is seeking to dismiss a lawsuit over a suspension problem on more than 400,000 Chevrolet Impalas from the 2007 and 2008 model years, saying it should not be responsible for repairs because the flaw predated its bankruptcy.

The lawsuit, filed on June 29 by Donna Trusky of Blakely, Pennsylvania, contended that her Impala suffered from faulty rear spindle rods, causing her rear tires to wear out after just 6,000 miles. [ID:nN1E7650CT]

Seeking class-action status and alleging breach of warranty, the lawsuit demands that GM fix the rods, saying that it had done so on Impala police vehicles.

But in a recent filing with the U.S. District Court in Detroit, GM noted that the cars were made by its predecessor General Motors Corp, now called Motors Liquidation Co or "Old GM," before its 2009 bankruptcy and federal bailout.

The current company, called "New GM," said it did not assume responsibility under the reorganization to fix the Impala problem, but only to make repairs "subject to conditions and limitations" in express written warranties. In essence, the automaker said, Trusky sued the wrong entity.

"New GM's warranty obligations for vehicles sold by Old GM are limited to the express terms and conditions in the Old GM written warranties on a going-forward basis," wrote Benjamin Jeffers, a lawyer for GM. "New GM did not assume responsibility for Old GM's design choices, conduct, or alleged breaches of liability under the warranty."

David Fink, Trusky's lawyer, declined to comment.

John Penn, a former president of the American Bankruptcy Institute who is not involved in the case, said the question of "successor liability" is common for manufacturing companies that go through bankruptcy.

"The fact it comes up now is not a surprise, as this type of issue was widely discussed during GM's bankruptcy," said Penn, now a partner at Haynes and Boone in Fort Worth, Texas. "The court will need to evaluate the claims to see if they fit within any cubbyhole of liability that New GM assumed."

GM said an argument similar to Trusky's failed this year in a case involving its OnStar security and navigation product.

"There are no specific factual allegations that New GM -- as opposed to Old GM -- did anything at all in relation to her vehicle," Jeffers wrote. "Plaintiff here is trying to saddle new GM with the alleged liability and conduct of old GM."

In late afternoon trading, GM shares were down $1.62 at $21.98 on the New York Stock Exchange.

The case is Trusky v. General Motors Co, U.S. District Court, Eastern District of Michigan, No. 11-12815. (Editing by Robert MacMillan)

http://www.reuters.com/article/2011/08/19/gm-impala-lawsuit-idUSN1E...

[XLFD]

Thanks for this tidbit, Dave.  GM can take taxpayer money so easily to stay afloat, and yet they want to shirk the responsibility of fixing their faulty cars because some of those same taxpayers who brought their cars before they got bailed out need to.  The GM position should be instructive for anyone who considers to buy one of their cars.  Get a Ford instead.