General Motors is facing an investigation from the National Highway Traffic Safety Administration over its handling of a recall affecting roughly 1.6 million cars, but the automaker may have found a legal shield from possible future consumer lawsuits. The solution hinges on the old, pre-bankruptcy GM, and the new company that emerged afterward. While the name is the same, on paper they are technically different firms.

According to Automotive News, the company negotiated with state attorneys general and consumer groups during its restructuring to only carry product liability on faults with vehicles from after it left bankruptcy in 2009. If any owners want to sue GM for issues that took place before that time, they would have to take it up with the "old GM" in a bankruptcy court. So far, all attempts to sue the new company for pre-2009 faults have failed.

"It is true that new GM did not assume liability for claims arising from incidents or accidents occurring prior to July 2009," said GM spokesperson Greg Martin to Automotive News.

Because the vehicles affected by the recall were built between 2003 and 2007, covering only claims after 2009 limits the number of possible cases. The current total of incidents related to the ignition switch fault sits at 31 accidents and 13 deaths. The General hasn't revealed when these crashes occurred, but Automotive News claims to know of at least one fatal crash in a Chevrolet Cobalt in December of 2009 that was caused by the airbag not deploying. Even if the automaker is able to limit product liability lawsuits, it's still facing a possible fine from NHTSA that could be as high as $35 million, a new record in the industry.


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  • 53 Comments
      normc32
      • 9 Months Ago
      Does your car shut off with a downward pull of the keychain? 2012 Forester - pulled the key chain downward and off the engine went.
      Martin Leclerc
      • 9 Months Ago
      It puzzles me that people are still buying from Government Motors...
        tylermars.design
        • 9 Months Ago
        @Martin Leclerc
        It puzzles me that people are still calling it Government Motors....
          Tariff The Imports
          • 9 Months Ago
          @tylermars.design
          Why? The Canadaian government still owns about 31,000,000 shares. Hence they still are Government Motors
        BGJ
        • 9 Months Ago
        @Martin Leclerc
        Most people are puzzled that you are under the impression that GM is the only company to ever have the government money involved in their business. Did you know that Chrysler was once (er, twice) bailed out? Did you know that Ford received nearly $6 billion from the government in a "loan" (bailout) Did you know that GM, Ford, and Chrysler all bailed out America (and the world) by building war machines to defeat Japan and Germany in WWII? Did you know that most Asian automakers were once or currently majority owned by their governments? Hope you don't buy from them.
          Tariff The Imports
          • 9 Months Ago
          @BGJ
          Ford did not take money in the form of a bailout. There loan was applicable to any viable auto company at the time ( Tesla and Nissan used it too ) and GM and Fiat owned Chrysler not eligible due to their bankruptcy. Do some research on the DOE Advanced Technology Vehicle Manufacturing Loan Program. Your comment in that regards is way off base.
          Yoggie
          • 9 Months Ago
          @BGJ
          Isnt the VW group at least partially owned and controlled by Germany? Isnt the Fiat group controlled in a similar way by Italy? And what about the French car industry? It seems like government ownership and or control is the norm, not the exception in the car industry.
      nocommie11
      • 9 Months Ago
      Reason #482 not to buy Government Motors jalopies.
      MechE
      • 9 Months Ago
      This bankruptcy was genius. They get to pawn off all their debts, get out of bailout repayment, screw stockholders and avoid being liable for crimes committed before their bankruptcy. At the same time, keep the history and heritage of the old company, intellectual property and overall company infrastructure. Everything bad...."oh that was Old GM". Everything good..."that was us, we are the same company".
        Bandit5317
        • 9 Months Ago
        @MechE
        GM payed off its bailout loans. Any money lost was due to the goverment choosing to receive payment in stocks, then selling those stocks for less than they paid for them.
      Doug
      • 9 Months Ago
      You people kill me - where were all of you when it came to Toyota rushing out to have NASA clear them of blame for the 20 plus death resulting from sudden acceleration? I didn't see all of you fanboys jumping in to say, "Toyota needs to take responsibility for this!" NO, as usual, you turned the other way, excused their engineering failures and jumped right in the line of kool aid drinkers when it came to buying another of their faulty, under-engineered and unoriginal designs.
        Merc1
        • 9 Months Ago
        @Doug
        What does that have to do with GM? M
        MechE
        • 9 Months Ago
        @Doug
        There's probably about 100 Toyota UA articles on auto blog and they all have plenty of hate. Toyota in general gets THE MOST hatred on this blog.
      That Guy
      • 9 Months Ago
      Good. Driver stupidity is not the fault of the manufacturer.
        William Weisberg
        • 9 Months Ago
        @That Guy
        So the recall has absolutely nothing to do with a defective ignition system, right? Wrong. This recent recall is just one of many in the long and list of recalls that have plagued GM and the big three through the years. It is claimed that keys hanging from the ignition are causing the engines to shut down. How could GM not foresee that owners/drivers would have more than one key on their key chain. The bottom line is that GM is getting away with murder and our bankruptcy laws are protecting GM. There really is no difference between the "old" GM and the "new" GM.
          lrx301
          • 9 Months Ago
          @William Weisberg
          I have seen numerous claims that the drivers had 40 some Lb bags hanging on the keys. I was just wondering if the engine shutting down issues only happened to these handful models of GMs, why in the hell all these GM car drivers hung unreasonable heavy weight on their keys? in other words, why in the hell the car drivers of other OEM's cars don't do this?
          Jerry
          • 9 Months Ago
          @William Weisberg
          The heavy key thing is an excuse. You have to validate for this kind of thing. Would see similar issues with other automakers' products if this really was such a big deal. GM is always quick to pull the "customer abuse" card.
          Actionable Mango
          • 9 Months Ago
          @William Weisberg
          40 pounds? Please link to these stories where they have found that the drivers who died in these cars had 40 pound key chains. I have read many of these stories and never heard that. Secondly, it's obviously a design defect since it's not happening to people with "40 pound keychains" in other brand cars or even other models from GM that don't use that ignition switch design.
      Doug Danzeisen Sr
      • 9 Months Ago
      How awesome is that? GM gets bailed out on our tax dollars, and innocents died driving their products due to known defects. GM is shielded from the effects of their errors due to the "Washing" via bankrupcy. In truth the American people were taken to the cleaners here unless GM steps up to make it right.
        That Guy
        • 9 Months Ago
        @Doug Danzeisen Sr
        They were not innocent. They contributed more to this than anyone. Calling them innocent is laughable.
          ngiotta
          • 9 Months Ago
          @That Guy
          ...as is calling you intelligent. Blame it all on the drivers when this doesn't happen with other automobiles. Practice what you preach and drive one of these piles of crap. Otherwise, STFU.
      sp33dklz
      • 9 Months Ago
      If you're still or have ever have purchased GM vehicles, joke's on you.
      churchmotor
      • 9 Months Ago
      Let's go back to 2010 back at the height of the Bailout of the broken and wounded GM by Barry Soetoro. The NHTSA had received 1,157 complaint about the Chevrolet Cobalt steering problems. In contract, the NHTSA had received 84 complaints about the Toyota Corolla. Guess who the NHTSA came down hard on, and guess which company continued to be ignored. Looks to me like the NHTSA and GM have been in bed together for a long time.
      Jan Calloway
      • 9 Months Ago
      This is so much bullish*t, they can claim the anniversary dates of their performance cars from the Pre GM time period but they can't be liable for any mistakes from Pre GM. I would have never bought a Pre GM product because they were crappy, i will never buy a New GM product because they will honor their past for profit but not honor it for the reason they make that profit, their customers.
      Jeff
      • 9 Months Ago
      Regardless of the legal-ease that may not force GM to recall and pay for the replacement, given all the US Government and the American taxpayer did to save GM and insure it remained standing, they shouldn't for a moment not own up and take care of this. Otherwise, it is just a gigantic slap in the face to everyone who supported them! Own up and fix these GM and don't wait till this plays out in the media, stand up and agree to do it now!
      WindsWilling
      • 9 Months Ago
      Great to see my tax money went to save a slimy company like this. People are DEAD due to their cover up, and they're going to get a slap on the wrists. All the suits involved with knowledge of this issue who swept it under the rug should be brought to court under criminal charges of manslaughter. GM probably KNOWS that there are far more cases about to spring up from this situation and are afraid of even more civil suits raised. Truly a terrible company ran by terrible people who make subpar products.
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