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GM Plays Legal Games With Its Recall Liability

steverstever Viva Las CrucesPosts: 41,296
edited April 24 in General
GM Plays Legal Games With Its Recall Liability

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Minivan fan. Feel free to message or email me - stever@edmunds.com.

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  • circlewcirclew Posts: 8,388

    GM Plays Legal Games With Its Recall Liability: Four Blunt Points

    When it comes to its ignition-switch debacle, General Motors (GM) wants to play it both ways. “Our full efforts are on our customers’ safety and fixing their vehicles as quickly as we can,” says spokesman Kevin Kelly. But that’s not quite accurate. Some of the company’s efforts—those undertaken by its well-paid lawyers—are being devoted to using the bankruptcy laws to erect a liability shield protecting GM from claims by those very customers.

    http://www.businessweek.com/articles/2014-04-21/gm-plays-legal-games-with-its-recall-liability-four-blunt-points?campaign_id=yhoo

  • busirisbusiris Posts: 3,490

    @circlew said: GM Plays Legal Games With Its Recall Liability: Four Blunt Points

    When it comes to its ignition-switch debacle, General Motors (GM) wants to play it both ways. “Our full efforts are on our customers’ safety and fixing their vehicles as quickly as we can,” says spokesman Kevin Kelly. But that’s not quite accurate. Some of the company’s efforts—those undertaken by its well-paid lawyers—are being devoted to using the bankruptcy laws to erect a liability shield protecting GM from claims by those very customers.

    http://www.businessweek.com/articles/2014-04-21/gm-plays-legal-games-with-its-recall-liability-four-blunt-points?campaign_id=yhoo

    Well, who coulda seen that coming?

    A business entity attempting to protect its assets?

    It's shocking...SHOCKING!!!

  • steverstever Viva Las CrucesPosts: 41,296

    "As part of a new emphasis on safety, General Motors has announced that 35 more product investigators will be added and its engineering division will be restructured into two organizations.

    Following the recall of 2.6 million vehicles that has been related to 13 deaths, GM is more than doubling its number of product inspectors and vows "militaristic zeal" to halt safety issues, Edmunds.com reported."

    GM Doubles Safety Investigators In Wake Of Recall (autoworldnews.com)

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  • berriberri Posts: 4,234

    The American legal system is an overly complex beast. I think GM has to be careful because a well intentioned step on the ignition might contravene the previous BK well beyond this and open the floodgates in many other areas. Very sad commentary of what is happening to the US; it's businesses, economy, consumers and society thanks to our courts I'm afraid :@

  • imidazol97imidazol97 Crossroads of America: I70 & I75Posts: 18,375
    edited April 24
     "The collection of lawsuits GM wants squashed is
      not related to 13 deaths or others injuries tied to 
      the defective switches covered under a recall of 
      2.6 million Chevrolet Cobalts, Saturn Ions and 
      similar small cars. The **50-plus suits are purely
      economic claims** related to the recall, such as 
      suing over the loss of a car’s value or for other 
      economic reasons."
    

    @berri said: The American legal system is an overly complex beast. @busiris said: A business entity attempting to protect its assets?

    One has to read the whole article to determine what the petition from GM actually was about. As in politics, the media sources like to write headlines to mislead and misrepresent. GM is only seeking relief from the non injury accidents primary pushed by the money-grubbing lawyers who can't find real work elsewhere so they run class action suits. We already have had two different gorillas repeating ads on TV more often than the folks selling the "free" undergarments for incontentent seniors paid for by Medicare during Judge Judy.

    I give GM a thumbs up for doing this.

  • circlewcirclew Posts: 8,388
    edited April 24

    General Motors' Brand Perception Has Fallen Off a Cliff: Report (Thumbs Down)

    General Motors Company (NYSE:GM) has an internal investigation underway, but with so many different regulators looking at different aspects of the recall, it has a lot of work ahead of it to satisfy everyone. The National Highway Traffic Safety Administration is more concerned with why the recall took so long to happen, while the Securities and Exchange Commission will focus on whether company filings were knowingly inaccurate, for example. It’s not clear what the Justice Department is looking at, but if the class action lawsuits are any guide it may be investigating the possibility of a cover-up.

    Which means that General Motors Company (NYSE:GM) is facing a lot of litigation and regulatory risk, as the company makes clear in its filing, but it also has to find a way to maintain consumer confidence as its dirty laundry is aired. Coming forward with damaging evidence could result in worse court settlements and immediate bad press, but GM also doesn’t want to look like it is continuing to hide safety and quality control problems.

  • circlewcirclew Posts: 8,388
    edited April 24

    In a blistering broadside posted on the investor website Seeking Alpha, Michael Blair, retired CEO of Canadian parts supplier Automodular went right to what he sees as the heart of the GM problem. "In my view," he wrote, "GM has a culture that is puerile, focused solely on short-term profits and replete with bad practices and weak governance."

    Blair knows firsthand. He says Automodular got burned after it invested millions of dollars in equipment and training to fulfill a contract for the subassembly of cockpits for the Chevy Camaro. As soon as production was about to begin, by his account, GM demanded a 50% reduction in price or threatened it would move the business to another supplier. When Automodular refused, GM dropped the hammer, and it was forced to shut down production -- at a loss of millions of dollars. He concludes: "It seems that GM knew of the [ignition switch] problem, hid it from sight until it could not be hidden any longer, and now profusely apologizes for the "terrible things" their actions gave rise to. The apology is likely hollow."

    Less than a year ago, a member of NHTSA's Office of Defect Investigation wrote an unusually candid memo to GM about its tardy response to NHTSA inquiries. "The general perception is that GM is slow to communicate, slow to act, and at times requires additional effort that we do not feel is necessary with some of your peers."

    That's a damning assessment for a company that purports to be a responsible corporate citizen. But it came after GM has spent the better part of decade sidestepping responsibility for the faulty ignition.

    Like Captain Renault discovering that there is gambling going on in Rick's Café, Mike Robinson, GM's vice president for environment, energy and safety policy, is shocked, by the criticism. "This note from NHTSA, both the content and tone, comes like a bolt out of the blue," he states in reply. "We worked way too hard to earn a reputation as the best, and we are not going to let this slide."

  • steverstever Viva Las CrucesPosts: 41,296

    Today's WSJ says that even though GM's profit fell this quarter, its strategy to raise prices and hold the line on incentives helped offset those costs.

    And that suggests that they aren't focused solely on short-term profits.

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    Minivan fan. Feel free to message or email me - stever@edmunds.com.

  • circlewcirclew Posts: 8,388

    Good thing that seems to be the case but more bumps ahead!

    “The automaker has made exceptional progress since the restructuring five years ago, but today's ultra-competitive global car market leaves little room for error, and the cost of the recall will have a substantial impact on near-term financials,” he said.

  • steverstever Viva Las CrucesPosts: 41,296
    edited April 25

    See, there's that focus on the near term again. Toyota took about two years, tops, to get through all the SUA stuff (and they have "recommitted" to quality).

    If I were Mary Barra, I'd be more concerned about the "ultra-competitive" EU and China markets. The ignition mess gives her a good opportunity to chop some managers and divisions, if the board will get out of her way. Assuming she can leech out some of that GM blood running in her veins.

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  • uplanderguyuplanderguy Kent, OHPosts: 7,494
    edited April 25

    "GM's perception drop was not as immediate as the drop that Toyota experienced during its well-publicized 2010 recalls," YouGove BrandIndex noted. "GM's apparent low point is only half the level of Toyota's nadir. Despite the small upturn, GM is still well into negative territory."

    Toyota reached a -63 score in a little over four weeks in 2010, according to the survey."

    Somehow, I didn't see this in the earlier post. ;)

  • busirisbusiris Posts: 3,490

    Who would find it surprising that bad news would negatively impact the consumer's view of a company?

    I didn't know a single Toyota owner during the UA hoopla that wouldn't consider buying another TOYOTA, and I don't know a single GM owner today that wouldn't consider buying another GM product if they were in the market for a new ride.

    Crap like this just gives car and financial rags something to gossip and opine about, IMO.

  • tlongtlong CaliforniaPosts: 4,766

    @circlew said:

    Like Captain Renault discovering that there is gambling going on in Rick's Café, Mike Robinson, GM's vice president for environment, energy and safety policy, is shocked, by the criticism. "This note from NHTSA, both the content and tone, comes like a bolt out of the blue," he states in reply. "We worked way too hard to earn a reputation as the best, and we are not going to let this slide."

    Seems like a lot of time has gone by since the BK and the excuse that GM has changed is getting more difficult to justify.

    There's a saying about the term "trailer trash" - "You can take the girl out of the trailer but you can't take the trailer out of the girl.". Such is the same with GM's DNA, it appears. Time for some gene therapy!

  • imidazol97imidazol97 Crossroads of America: I70 & I75Posts: 18,375
    edited April 25

    There's a saying about the term "trailer trash" - "You can take the girl out of the trailer but you can't take the trailer out of the girl.".

    There are a lot of people who would be offended by the reference to trailers as a home less than what others live in as it reflects on the character of the homeowners and family. Maybe people in Florida as one example.

  • circlewcirclew Posts: 8,388

    It's not surprising there are negative views regarding the Toyota UIA recall and there handing of the problems.

    That was then.

    GM is now. They need to live with it, own up and change if they can. You know GM...always following!

    BTW, I was surprised to see I had auto headlights on my Mazda CX-9 Grand Touring! ;)

  • uplanderguyuplanderguy Kent, OHPosts: 7,494
    edited April 26

    "That was then" (2010).

    From the guy who still brings up the 1971 Chevy motor mount recall. ;)

    I did wonder why it appeared that you edited out that part about the Toyota negative perception. It was plainly in the article I read about the same survey.

This discussion has been closed.