So much for the President's promises . . .

It seems the 'new' General Motors Corp. (the post-bailout version) isn't about to honor guarantees issued by its predecessor. Reuters reports:

General Motors Co. 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 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."

There's more at the link. Contrast this with the promises made by President Obama in March 2009:

"Let me say this as plainly as I can. If you buy a car from Chrysler or General Motors, you will be able to get your car serviced and repaired just like always," Obama said in a speech. "Your warranty will be safe. In fact, it will be safer than it has ever been. Because starting today, the United States will stand behind your warranty."

GM and Chrysler are at a high risk of bankruptcy as they face some of the lowest U.S. sales rates in 27 years, analysts have said. The government on Monday took several actions to help shore up the two automakers after forcing the resignation of GM CEO Rick Wagoner.

"Given where the industry is, these highly unprecedented actions are consistent with the unprecedented times we're in," Standard & Poor's analyst Robert Schulz told Reuters today.

Both companies have said that bankruptcy would snuff out sales because consumers wouldn't buy a car from a company that might not be around to honor the warranty and provide service and spare parts.

Any funds for the warranty program will come from the $700 billion Troubled Asset Relief Program (TARP) provided by Congress, according to White House fact sheet on warrantees that was distributed last night.

Again, more at the link.

TARP funds were given to the 'new' GM Corp: so it seems logical that it should be liable for warranty repairs that will be paid for using such funds. If it's not, who is? The 'old GM' no longer has any dealers, or service stations, or mechanics, or even spare parts to fix warranty problems.

Shenanigans like this, plus President Obama's riding roughshod over the legal rights of bondholders, pensioners and other stakeholders in General Motors and Chrysler Corp. in order to lavish benefits upon his trade union buddies, are why I vowed, two years ago, that I'd never again buy a new GM or Chrysler vehicle. I've seen nothing since then to make me alter my decision.





Peter