General Motors "Ignition Recall" Fiasco Thread
03-27-15, 12:06 PM
#138
From an insurance industry newsletter I receive:
A bankruptcy judge told General Motors Co. six years ago it didn’t have to worry about lawsuits over cars made before its $49.5 billion government bailout. Last month, the same judge said he wasn’t so sure anymore. U.S. Bankruptcy Judge Robert Gerber expressed doubts about his decision, saying it might allow GM to get away with alleged misconduct tied to an ignition switch defect in some cars. GM may have acted “very badly” in delaying recalls of cars it knew might be dangerous, Gerber said at a hearing in New York Feb. 17. The judge said at the time that he’s deciding how to “fix” his 2009 ruling, and that he may take more than a month to do it.
“It’s rare for a judge to admit he might have made an error,” said Chip Bowles, a bankruptcy lawyer at Bingham Greenebaum Doll LLP who isn’t involved in any GM cases.
At least 74 people were killed when GM cars suddenly turned off after the ignition was jostled. More than 2.59 million vehicles have been recalled for just one type of switch defect. Affected car owners who weren’t injured sued Detroit-based GM, seeking compensation for their vehicles’ loss in value.
If Gerber rules bankruptcy doesn’t protect GM from such value claims for cars made before 2009, GM may face as much as $10 billion in potential liability over the scandal, plaintiff lawyers have said. One analyst said costs could reach a more conservative $7 billion.
Gerber told GM and drivers that he might not agree wholly with either side, saying he expects “a pile of appeals.”
In 2009, Gerber said GM couldn’t be sued over cars made by its defunct predecessor, known as Old GM. At the hearing last month, he said maybe he should have ruled that “people couldn’t sue based on anything” GM had done before bankruptcy, but that they could sue if the company that emerged failed to warn them about what Old GM had done. “New GM” should have warned car owners that, when the ignition switches were jarred, their vehicles could stall and their air bags might not work, plaintiffs lawyers claimed.
Gerber said that he is considering ruling that, while drivers can sue on that claim, they can’t demand money for a defective switch the new company didn’t make. The judge said his 2009 ruling gives New GM a “get out of jail free card,” even if Old GM knowingly installed a bad switch.
While most of the drivers awaiting Gerber’s ruling are suing over car value, more than 30 lawsuits have been filed over accidents.
Ignition-switch suits and fines might cost GM more than $7 billion “if the U.S. bankruptcy court amends GM’s bankruptcy shield for vehicles manufactured under old GM,” Morningstar Inc. analyst David Whiston has estimated.
Toyota Motor Corp. paid $1.2 billion to settle a U.S. probe into sudden unintended acceleration and $1.6 billion to drivers suing over car prices. The first accident suit Toyota lost was settled just before a jury was to discuss punitive damages, and the Japanese carmaker said this month that it had resolved or agreed to resolve 289 other death and injury suits.
A bankruptcy judge told General Motors Co. six years ago it didn’t have to worry about lawsuits over cars made before its $49.5 billion government bailout. Last month, the same judge said he wasn’t so sure anymore. U.S. Bankruptcy Judge Robert Gerber expressed doubts about his decision, saying it might allow GM to get away with alleged misconduct tied to an ignition switch defect in some cars. GM may have acted “very badly” in delaying recalls of cars it knew might be dangerous, Gerber said at a hearing in New York Feb. 17. The judge said at the time that he’s deciding how to “fix” his 2009 ruling, and that he may take more than a month to do it.
“It’s rare for a judge to admit he might have made an error,” said Chip Bowles, a bankruptcy lawyer at Bingham Greenebaum Doll LLP who isn’t involved in any GM cases.
At least 74 people were killed when GM cars suddenly turned off after the ignition was jostled. More than 2.59 million vehicles have been recalled for just one type of switch defect. Affected car owners who weren’t injured sued Detroit-based GM, seeking compensation for their vehicles’ loss in value.
If Gerber rules bankruptcy doesn’t protect GM from such value claims for cars made before 2009, GM may face as much as $10 billion in potential liability over the scandal, plaintiff lawyers have said. One analyst said costs could reach a more conservative $7 billion.
Gerber told GM and drivers that he might not agree wholly with either side, saying he expects “a pile of appeals.”
In 2009, Gerber said GM couldn’t be sued over cars made by its defunct predecessor, known as Old GM. At the hearing last month, he said maybe he should have ruled that “people couldn’t sue based on anything” GM had done before bankruptcy, but that they could sue if the company that emerged failed to warn them about what Old GM had done. “New GM” should have warned car owners that, when the ignition switches were jarred, their vehicles could stall and their air bags might not work, plaintiffs lawyers claimed.
Gerber said that he is considering ruling that, while drivers can sue on that claim, they can’t demand money for a defective switch the new company didn’t make. The judge said his 2009 ruling gives New GM a “get out of jail free card,” even if Old GM knowingly installed a bad switch.
While most of the drivers awaiting Gerber’s ruling are suing over car value, more than 30 lawsuits have been filed over accidents.
Ignition-switch suits and fines might cost GM more than $7 billion “if the U.S. bankruptcy court amends GM’s bankruptcy shield for vehicles manufactured under old GM,” Morningstar Inc. analyst David Whiston has estimated.
Toyota Motor Corp. paid $1.2 billion to settle a U.S. probe into sudden unintended acceleration and $1.6 billion to drivers suing over car prices. The first accident suit Toyota lost was settled just before a jury was to discuss punitive damages, and the Japanese carmaker said this month that it had resolved or agreed to resolve 289 other death and injury suits.
10-28-18, 09:49 AM
#139
Lexus Fanatic
Watching there 5 th Estate about this fiasco. I can't believe people trust GM. I have three vehicles that are older than some of the GM cars that have these issues. Thank goodness we stayed away from GM for the last few decades.
10-29-18, 07:39 AM
#140
Lexus Fanatic
Don't forget.....in that time, GM has also sold a number of rebadged Toyota, Isuzu, and Suzuki products of Japanese origin....not to mention the rebadged German Buick/Opels.
10-31-18, 05:44 AM
#141
Lexus Fanatic
It is funny how entities can be too big to fail, in this modern time. And it's never about good v. evil, either. Sears is not evil, yet it's gone. I had to pinch myself when I was getting $5 off $5 coupons via email multiple times, $10 off $15, etc. I used one of them towards a 3rd party seller (ECS) and got a BMW jack pad for $10 off with free UPS shipping to a Sears store. I got countless tools. My buddy said you are driving them into the ground. Then you have GM.
With these dangerous scenarios and people even harmed, no consequences. How about the DRLs burning out since 2002, known issue documented via TSBs, and GMC Acadia headlights costing $1,000 per side being ruined as a result (saw this on the web)? If 12.8v bulbs burn out due to heat, use 14v bulbs instead they will last longer until the harnesses melt. Shame on them (3157 vs. 4114 on GM vehicles pre-led DRLs, yeah the latter are also higher wattage, 31.2 v. 26.9, remember v=ir from hs physics?).
Other mfgs don't get away with it. BMW has until 1/31/19 to pay out the class action re: Takata. And this is a car co. who willingly provided loaner cars to anybody who wanted one, some up to 18 mos. That "is" goodwill.
With these dangerous scenarios and people even harmed, no consequences. How about the DRLs burning out since 2002, known issue documented via TSBs, and GMC Acadia headlights costing $1,000 per side being ruined as a result (saw this on the web)? If 12.8v bulbs burn out due to heat, use 14v bulbs instead they will last longer until the harnesses melt. Shame on them (3157 vs. 4114 on GM vehicles pre-led DRLs, yeah the latter are also higher wattage, 31.2 v. 26.9, remember v=ir from hs physics?).
Other mfgs don't get away with it. BMW has until 1/31/19 to pay out the class action re: Takata. And this is a car co. who willingly provided loaner cars to anybody who wanted one, some up to 18 mos. That "is" goodwill.
10-31-18, 06:16 AM
#142
Lexus Fanatic
- All 2005-2010 Chevrolet Cobalt
- 2007-2010 Pontiac G5
- 2003-2007 Saturn Ion
- 2006-2011 Chevrolet HHR
- 2006-2010 Pontiac Solstice
- 2007-2010 Saturn Sky
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