Chrysler/GM Bankruptcies

Wednesday, June 3, 2009

For Release:
June 3, 2009

Contact: Joanne Doroshow or Andy Hoffman
(212) 267-2801
; cell (917) 548-5263


Washington, D.C. - Victims and families from five states, some with catastrophic injuries, are asking Congress today for urgent help in light of the Chrysler and GM bankruptcies, which are wiping out their legal rights and those of millions of other Americans.  According to the Chrysler bankruptcy plan, families driving any Chrysler now on the road (more than 10 million vehicles), whose occupants are severely injured in a collision or otherwise because the car was not made safely, will have no recourse against the company.  The GM bankruptcy proposes the same thing (more than 30 million vehicles).*

Families coming to Washington today traveled at great distances and with tremendous difficulty to plead for help.  According to Joanne Doroshow, Executive Director of the national consumer group Center for Justice & Democracy, which is assisting the victims, “Of all the victims who could suffer from these bankruptcies, none are as tragic as the many men, women and children who were severely injured due to defectively designed or built cars, whose rights would be completely wiped out.  What’s more, this result is completely avoidable. There are practical and relatively affordable solutions to this problem.”

Among those traveling to Washington are Shaun Doss, age 8, and his father Robert, from Gilbert Arizona.  As a 6-year-old, Shaun became severely injured and is now paraplegic when the seatbelt in his Dodge Durango failed during an accident.  Robert, a single father and army veteran, says trying to keep up with the medical expenses incurred from the accident has been impossible.  Caring for Shaun has ultimately cost him his job, house, and car.  Robert said, “I’m not a crying person, but I cried every day of the three months I spent at Shaun’s side in the hospital.”  Robert currently has a lawsuit pending against Chrysler, which will not go forward under Chrysler’s plan.

It is estimated that every year, there are about 500 to 1000 serious injuries or deaths due to cars that are designed or built with defects.  The rights of all of these men, women and children are extinguished under the Chrysler and GM bankruptcy plans.  Some of these defects include:

  • seatbelts that fail and strangle children;
  • seat backs that collapse and cause brain injury;
  • unstable vehicles that flip and roofs that cave, crushing occupants;
  • cars with gears that “self-shift” from park to reverse and run someone over; and
  • gasoline tanks or brake fluid containers that are improperly positioned and catch fire or explode, severely burning or killing the occupants. 

There will be a full U.S. Senate Committee on Commerce, Science, and Transportation hearing Wednesday June 3 at 2:30 on the GM restructuring.  Victims are hoping the Committee addresses this issue.  They will be visiting the offices of Senators and Members of Congress.

Doroshow said “Under the Chrysler bankruptcy, warranties will be honored and money is set aside to cover replacement of defective car parts.  However, if the part causes an accident or leads to a catastrophic injury or death, the company is off the hook.  This is outrageous and unfair.  Consumers should know that other car companies can still be held accountable for making unsafe cars but Chrysler or GM cannot.”  She indicated that possible solutions to help victims include:

  • Ensure that Chrysler and Fiat - and GM - accept responsibility for existing products (successor liability).
  • Develop a victims’ fund that would allow current and future injured consumers to proceed with their cases; this money could be accessed only after a claim is resolved successfully.
  • Purchase a retroactive insurance policy purchased to cover past, present and future injury claims.

*This is a conservative estimate reflecting the approximate number of vehicles still under warranty based on sales.  However, with the exception of states with statutes of repose for product liability claims, defect claims can be brought at any time irrespective of the year of a vehicle's manufacture.  Based on 2008 vehicle registration data from RL Polk there are approximately 30 million Chrysler and 69 million GM cars and light trucks on the road. 2008 US Light Duty Vehicle Registrations, RL Polk Inc.


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