Niagara Gazette

Columns

March 27, 2014

TOM'S CORNER: From the automotive news desk at America's Car Show

Niagara Gazette — Ticker tape is running and flash! It’s another edition of Automotive News from America’s Car Show served up piping hot off the presses!

... Regarding the growing GM recall that is now referred to in the automotive media as “Switchgate.”

 

New GM isn’t liable for accidents that happened under old GM’s watch

As you probably know by now, General Motors is in hot water for a series of recalls that affect more than 1.3 million vehicles in the U.S. The National Highway Traffic Safety Administration in particular, wants to know why GM is just now recalling the cars when it began receiving complaints about the underlying problem more than a decade ago. The recall stems from faulty ignition switches on select Chevrolet, Pontiac, and Saturn vehicles from the 2003 to 2007 model years. Those switches have been linked to at least 31 collisions and 13 deaths. Chances are good that consumers will file some kind of class action lawsuit against the automaker, but whether they’ll win their case is up for debate. Why?

Because GM filed for bankruptcy in 2009 and in doing so, it became a new legal entity. General Motors Corporation was laid to rest, and from its ashes arose the General Motors Company. The name change may seem insignificant but it carries big implications for the current recall. That’s because the company that made the defective vehicles no longer exists, and GM Company has little if any liability. As AutoNews points out, today’s General Motors Company is only liable for accidents that occurred after the automaker emerged from bankruptcy in July of 2009. Any collisions or deaths prior to that would’ve happened on the old General Motors Corporation’s watch. Plaintiffs can still sue the “old” GM, but they’ll have to do so in bankruptcy court, where payouts are hard to come by.

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