GM to Allow Some Product Liability Claims

The Washington Post
Monday, June 29, 2009

General Motors will assume responsibility for product liability claims filed after the carmaker emerges from bankruptcy protection, a concession that removes a potential obstacle to the Obama administration's plan for the company's quick restructuring.

Consumer groups welcomed the amendment but said the automaker, along with Chrysler, should do more. After bankruptcy proceedings similar to those being pursued by GM, Chrysler's assets were sold to a new entity led by Italian automaker Fiat, free of existing and future product liability claims.

On Friday Rep. André Carson (D-Ind.) introduced legislation that would require automakers to purchase liability insurance if they are owned by the federal government or have federal loans. This insurance must protect against past and future claims, even after a bankruptcy filing.

"Congress still needs to step in and do something for Chrysler victims," said Joanne Doroshow, executive director of the Center for Justice and Democracy. "That bankruptcy is over. The only way for victims to get help is if there's a law that establishes it."

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