Consumer groups reportedly asking for liability warning labels on used Chryslers
When Chrysler was in Chapter 11, the U.S. bankruptcy court decided that the new Pentastar would be free of any liability for accidents that involve Chrysler-branded products sold prior the bankruptcy. Automotive News is reporting that five consumer groups are looking to get the word out that used Chrysler products will not be eligible for such liability claims by putting a warning sticker on each and every used Dodge, Chrysler, and Jeep that is for sale.
The Federal Trade Commission is reviewing the petition, which states that consumers who purchase a used Chrysler vehicle risk "being held responsible for millions of dollars in medical expenses, hundreds of thousands of dollars in lost income and other losses – with no possibility of recompense – even if their injury was clearly Chrysler's fault." Under the current plan, customers looking to sue Chrysler for defective product concerns will have to go after old Chrysler, which is broke, bankrupt, and doomed.
Chrysler, of course, is against the petition, as the warning may harm a dealer's ability to sell used Chrysler-branded products. In an email to Automotive News, Chrysler spokesman Michael Palese wrote "In Chrysler's bankruptcy, the ability to form a new company free from the product liability burden of the old company was essential to the new company's survival." Palese also mentions that the petition has also uncovered no new defects or safety issues.
Automotive News is also reporting that General Motors has worked out a deal with state attorneys general to consider claims as long as they were submitted after the automaker's bankruptcy.
[Source: Automotive News - subs req'd | Image: Robyn Beck/AFP/Getty]
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Reader Comments (Page 1 of 2)
mapoftazifosho 11:43AM (7/08/2009)
Is his also the case with GM vehicles?
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jpm100 11:46AM (7/08/2009)
The last line appears to say otherwise:
"Automotive News is also reporting that General Motors has worked out a deal with state attorneys general to consider claims as long as they were submitted after the automaker's bankruptcy."
Seems like the GM bankruptcy was better thought out than Chrysler bankruptcy. Or, Fiat doesn't care and assumes it won't reflect onto them.
polo 2:30PM (7/08/2009)
What if you have full auto-insurance coverage (comprehensive and collision), would this make a difference?
I guess it means the victims will only get what the insurance coverage provides, and not be sue the car company for more?
I still don't see how this would make the car owner at-risk if they can prove in court the defect is not their fault and they have full insurance coverage.
the4thheat 2:04AM (7/09/2009)
Most insurance policies don't cover nearly enough if a defect paralyzes you or something similar. Keep in mind that even if you had health insurance they don't cover healthcare related to car accidents because that's the under your car insurance.
So once you've gone over whatever your car insurance policy covers for medical you're basically on your own for the rest of your paralyzed, income-less life.
Of course most accidents and injuries aren't due to defects, but the lack of liability here means that even if the airbags suddenly self-triggered while you were driving and caused your car to veer off the highway and flip over several times, you could only sue the old and broke Chrysler. Which would kinda suck if you were horribly injured and now have no job and no money to pay your healthcare bills.
viper GTS-R 11:44AM (7/08/2009)
Hmm sounds like a great idea, while were at it let's put warning labels on Ferrari's too since they seem to spontaneously combust and burst into flames.
Aren't there warning labels on everything now a days even things like peanut butter? Can't we put warning labels on the stupid drivers out there that cut us off, run red lights, and run out of blinker fluid instead?
--RS
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alexanbd 11:49AM (7/08/2009)
The warning is not because vehicles are inherently dangerous, it is because "new" Chrysler, like "new" GM has been afforded the luxury of shedding any and all prior products liability claims. It's not that cars are dangerous, it's that if you buy a car made by "old" Chysler and/or GM, you cannot bring a products liability suit - no matter how valid your claim may be. This means an individual purchaser/driver will be stuck with any resulting damages, perhaps with some help from insurance coverage.
viper GTS-R 11:51AM (7/08/2009)
many beans to you sir for clearing that up!
but still we should put warnings on stupid drivers.
tuxchown 11:52AM (7/08/2009)
How about labels for Toyota too, since they rarely stand behind their warranties and insist on forcing their customers to sue in order to be covered for their defective products.
http://www.consumeraffairs.com/news04/2007/01/toyota_sludge_settlement.html
Kevin 11:59AM (7/08/2009)
Yeah about the warning labels on bad drivers...I believe a day or two ago there was a mom wanting to put "CAUTION" stickers on newly licensed drivers cars. This warning label idea is right up her ally.
But seriously, I don't like the idea of giving this "new" Chrysler, or even the "new" GM for that matter, a get out of jail free card for any lawsuit based on the "old" company. I can understand Chapter 11 and freebie you get not having to pay off debt, but if a product happens to kill or injure someone, and your company is to blame, that is a totally different issue than owing a supplier 15,000,000 dollars. Your company isn't different, new, or reformed, its still that company just with a bankruptcy monkey strapped on its back.
SpaceGoatPriest 11:46AM (7/08/2009)
While it does sound kinda extreme, they do have a point.
(I am not referring to ambulance chaser lawsuits, but legitimate ones)
What is someone is paralyzed in a wreck because of something that is clearly a manufacture defect. Even it the car is preowned, you would think the company would be liable, but in GM/Chrysler case they won't be. That is definitely something the general public should be made aware about.
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SpaceGoatPriest 11:48AM (7/08/2009)
Sorry, looks like GM will 'consider' claims.
Frank 12:45PM (7/08/2009)
Dear GM owner,
We have "considered" your liability claims on your Old GM vehicle. After due "consideration" we have rejected your claim.
Sincerely,
New GM
SpaceGoatPriest 1:01PM (7/08/2009)
Yea Frank,
That is what I was thinking. I was just trying to be nice.
Dave 11:53AM (7/08/2009)
"In Chrysler's bankruptcy, the ability to form a new company free from the product liability burden of the old company was essential to the new company's survival"
Hello!?! It could also be looked at another way... The new companies survival depends on product...if you wont back up your OLD product why would I trust ANY product from you?
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Judy Zik 12:05PM (7/08/2009)
You hit the nail on the head.
It is pretty simple. Every buyer should be read that statement by "New Chrysler". To me it says that they feel their own recent lineup is that flawed that they were worried lawsuits would pull them under. I can't think of a better reason NOT to buy a used Chrysler and I would think twice about buying a new product from a "new" company that would do that to it's customers.
daveg28 12:05PM (7/08/2009)
I don't know...It sounds like my 2005 Sebring Coupe is just about to be worth even less than I thought. And I'd really like to trade that sucker in sometime in the future.
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raaeeevo1 12:14PM (7/08/2009)
Have you driven a FORD lately???????
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XJ 1:44PM (7/08/2009)
Not after my last one broke down at a stoplight in a busy intersection. Sad but true...
Venom 12:20PM (7/08/2009)
I think there was a mistake with the pricing on the Chrysler in the photo.
It should be $1,599 not $15,991
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Jason 12:33PM (7/08/2009)
Yet another reason why I'm thankful we decided to lease our 300 instead of buying it.
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