- General Motors is seeking to dismiss a lawsuit over an alleged suspension problem on 400,000 2007-'08 Chevrolet Impalas, telling Inside Line that "New GM should not be held responsible for an alleged design flaw in a vehicle that was built before the New GM was created in bankruptcy."
- The issue of so-called "successor liability" is common for manufacturing companies that go through bankruptcy, say legal experts.
- The case, Trusky v. General Motors in U.S. District Court, Eastern District of Michigan, may set a precedent for other GM vehicles built before the automaker's 2009 bankruptcy and subsequent public bailout.
DETROIT — General Motors is seeking to dismiss a lawsuit over an alleged suspension problem on 400,000 2007-'08 Chevrolet Impalas, telling Inside Line that "New GM should not be held responsible for an alleged design flaw in a vehicle that was built before the New GM was created in bankruptcy."
The Impalas in question have not been recalled by General Motors, although some consumers have filed complaints about the suspension problem with the National Highway Traffic Safety Administration.
The lawsuit was filed on June 29 by Donna Trusky of Blakely, Pennsylvania. Trusky contends that her Impala had faulty rear spindle rods, causing excessive wear on the vehicle's rear tires. The lawsuit demands that GM fix the rods.
But in a GM filing in U.S. District Court in Detroit, the automaker said that the cars were made by Old General Motors, the legal entity that was created as a result of the company's 2009 bankruptcy and subsequent public bailout and is separate from today's General Motors.
"GM will honor any written or expressed warranty on any of its vehicles, such as the standard three-year, 36-month bumper-to-bumper warranty or the five-year, 100,000-mile warranty on a powertrain for vehicles that have that warranty expressed in writing, so customers have not lost any protection there," wrote Alan Adler, a GM spokesman in response to an e-mailed query from Inside Line on Monday. "What the court filing says is that New GM should not be held responsible for an alleged design flaw in a vehicle that was built before the New GM was created in bankruptcy."
The issue of "successor liability" is common for manufacturing companies that go through bankruptcy, say legal experts.
The Harvard Law Review notes that "the doctrine of successor liability allows both predecessor and successor corporations to avoid liability for harm inflicted by predecessors."
The case, Trusky v. General Motors in U.S. District Court, Eastern District of Michigan, may set a precedent for other GM vehicles built before the 2009 bankruptcy.
Inside Line says: Of course, it was the taxpayers who bailed out GM — old and new.
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qdp says:
12:34 PM, 08/23/2011
Common law stipulates that, in bankruptcy process, public/consumers' interest is overriding any other parties' interests, such as debt-holders or Union, through selling company's assets to set up a reserve fund for any potential consumers' claims. In GM case, new GM is the carry-over of the old, both responsible for any potential claims and collecting payments from previous leases
pchang7 says:
11:38 AM, 08/23/2011
@wikiwiki
I completely agree with you on why I will never buy an American car, but please don't mistake and interchange capitalism with corporatism.
Corporatism is being exhibited here, not capitalism. There is no true capitalistic environment in the U.S. anymore. I am all for regulation, but not for creating legislation to allow the big companies to not pay for their mistakes and bad ideas.
This is exactly what happened with GM.
What do you think will happen if your child is not punished for stealing from a candy store? In fact, what would happen if you rewarded your child for stealing? More than likely, he would do it again. and again. and again.
run_and_drive says:
11:16 AM, 08/23/2011
And people wonder why I think Lawyers are half the problem with society today... they're the ones that allow companies to get away with these silly (and sometimes dangerious) games.
2010ms3 says:
09:16 AM, 08/23/2011
It is a shell game, I'll give you that. But it is handled the same as if GM filed for bankruptcy and qdp bought all their old equipment and patents and everything good and opened qdp motors. qdp wouldn't owe any old impala owners anything for what GM did. Now just pretend that after you bought GM and called it qdp motors you then renamed it GM Corp. That's what they did. It is all paper and all pretend but at the same time real, legal and binding. People can jump up and down and point at it and yell "it is the same" all they want and the lawyers will just laugh and laugh and laugh.
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This may be true, but this is so obviously an attempt to weasel their way out of responsibility that it actually offends me (and many others). What GM needs right now is to shake off its bankrupt 'Old GM' image, and replace it with the financially stable and trustworthy 'New GM' image even if it means dealing with this one Impala and however many other Impalas may be brought to the attention of New GM.
In other words, stand behind the products that the buying public knows were made by YOU, whether you're Old or New GM, and stop trying to save on short term costs that will cost you more in the long run through negative public perception.
It's simple... all they had to do was to agree to fix the Impala when she brought it in and complained about it. It didn't have to become as public as a court case... just a fix under warranty and the whole thing is handled smoothly, quietly with no fuss or muss.
2010ms3 says:
08:58 AM, 08/23/2011
Which is the only company whose President actually appeared before congress and the whole nation to apologize for idiots that don't know how to drive their own cars?
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To this day, I cannot understand why it was not possible to stop the car. Gas pedal stuck? Step on the brakes. Brakes not working? Put the car in Neutral to disengage the transmission.
In the unlikely event that neutral fails to work.... turn the key to off.
Like... seriously. "Idiots that don't know how to drive their own cars" is correct.
lions208487 says:
08:09 AM, 08/23/2011
@aku
Thanks for reading one sentence. You're special. I meant defect, but thanks for pointing out one error.
As the rest of my blog indicated; GM as well as other large corporations only look out for their own financial well being, and not only GM has played this game in order to forgo their own responsibility toward the consumer.
Yes GM is at fault and they should own up to their mistake regardless of their so called debt crisis at that time.
My point is do not just blame GM, but all corporations who neglect the consumer's best interest.
mklrivowner says:
07:11 AM, 08/23/2011
Thank you for the comments @yamahr1. Very well put together. I'd be interested in seeing a follow-up when the case is settled/thrown out, but I doubt we ever will.
wikiwiki says:
06:40 AM, 08/23/2011
This is why I refuse to buy "American." They will take our money to cover their financial failures and screw us the second they get the chance. Capitalism at its finest. Socialism is looking better and better every day. Look up Social Democracy like they have in Norway, Sweden, Finland, etc. It's just better.
I will never buy GM or Chrysler.
camaro84 says:
06:30 AM, 08/23/2011
If you're honoring the warranty, you're behind the product. PERIOD. GM pay up or GTFOH.
yamahr1 says:
05:23 AM, 08/23/2011
As I previously posted, the real story here is that Lienart has deceptively written this article in the same vein of the "GM Lied" nonsense (about the Chevy Volt's brilliant powertrain) that ran on these same "pages". Buried deep in the middle is the fact that one woman in PA and her lawyer filed a lawsuit over her single Chevy Impala, because she wants a free set of tires (and who knows what damages for mental anguish.) In that one-person law suit it's alleged that 400,000 cars are affected by a defect, which I'll repeat remains unsubstantiated. In fact we get no idea of the real history of this case, and what GM may have done prior to try and satisfy the complaints of this one person. If you don't read the article carefully, which no doubt Lienart wants us to not do, it seems like a class action suit affecting 400,000 cars, and it's the case of the century to let GM wrangle out of fixing pre-bankruptcy cars. I call BS. Like in any lawsuit, a good lawyer on the defense side will cite any legal precedent to try to get the suit dismissed.
It's actually sad how many people obviously got reeled in here by this yellow journalism.