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GM Gambles on Reversal of Appeals Court Ruling

Company exposed to new set of liabilities.

by on Aug.15, 2016

GM is appealing the ruling of a three judge panel on the court of appeals that exposes it to millions of dollars in new liabilities.

Lawyers for General Motors are gambling they can persuade the full panel of judges from the U.S. Second Circuit Court of Appeals to reverse an opinion by one the court’s three judge panels in the ongoing battle surrounding its faulty ignition switches.

The panel recently ruled against the company, leaving it potentially facing millions in dollars in additional liabilities in the lengthy legal fight over the defective ignition switch in GM vehicles linked to more than 120 deaths.

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The original ruling, which was made public in July, represented a significant setback for GM in the long-running litigation since it reversed part of a bankruptcy court decision that protected the automaker from some lawsuits over the defect that prompted the recall of 2.6 million vehicles in 2014. (more…)

GM’s Legal Problems Continue to Grow

Automaker likely to be center of Presidential campaign this fall.

by on Jul.20, 2016

Donald Trump's selection of Indiana Gov. Mike Pence is likely to keep GM as well as Fiat Chrysler in the news. Pence was a critic of the auto baillout.

If you listen to General Motors executives, the company’s 2009 bankruptcy is an event from the company’s distant history. For GM’s lawyers, however, the bankruptcy and its aftermath is still very much alive.

Many of the creditors have never given up trying to recover the money they say is owed to them by what has come to be known as “Old GM,” and the trust that has liquidated assets, primarily real estate that the company abandoned, during its short trip through bankruptcy court back seven years ago.

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Earlier this week, the dissatisfied creditors won the right from bankruptcy judge in Manhattan to pursue a $1.5 billion claim, stemming from the bankruptcy. (more…)

“New” GM Scores Small Court Victory

Judge claims car owners can't sue for lost value.

by on Jul.18, 2016

GM scored a small victory in court today when a judge dismissed a large chunk of potential claims against the automaker related to its faulty ignitions.

A New York federal judge dismissed a portion of the claims lodged by a proposed class of car owners within the General Motors Co. – “New” GM – ignition switch multi-district litigation, saying they exaggerated their claim.

The group argues the automaker’s alleged cover-up of dozens of defects devalued their vehicles, suggesting the damages run as high as $10 billion, but in a ruling certain to be appealed, a federal district judge in Manhattan has ruled the drivers’ “unprecedented” damages theory was flawed.

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The plaintiffs’ pursuit of damages based purely on perceived harm to GM’s brand following more than 70 recalls in 2014 was “unprecedented and unsound,” U.S. District Judge Jesse Furman wrote in his opinion, adding to the complex legal thicket surrounding the ignition switch controversy. (more…)

Barra Says Low Gas Prices Won’t Change GM Plans

Automaker continues to learn lessons from recalls.

by on Jan.15, 2015

GM CEO Mary Barra told Keith Crain, Automotive News editor-in-chief, that the automaker's plans haven't changed with the drop in gas prices.

The big drop in oil prices isn’t prompting General Motors to change its plans or strategy, GM Chief Executive Officer Mary Barra said this week.

Barra was asked about the drop in oil and gasoline prices, which are down 55% in the past six months, during a discussion at the Automotive News World Congress with Keith Crain, the publication’s editor-in-chief.

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“I can tell you this. It hasn’t changed our plans one bit. I think everyone is a little perplexed. I don’t know what it’s going to be,” Barra said in reply to the question by Crain. Barra also admitted the recall crisis made her first years as GM’s top executive very difficult. “We’ve learned a lot,” she said. (more…)

Bankruptcy May Save GM Once Again

Filing terms prevent pre-2009 product liability lawsuits.

by on Mar.10, 2014

The 2004 Saturn Ion Coupe is on the list of vehicles being recalled by GM, but the automaker may not be accountable for the vehicles.

Bankruptcy saved General Motors and it may save the company again, at least from a significant liability issue and the millions of dollars that might go with it.

When GM went through bankruptcy it created a “new” GM leaving the debt and many of the liabilities with the “old” GM. This separation extends to product liability, according to an Automotive News report.

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Under the terms of its restructuring, GM’s product liability extends only to accidents that happened after the “new” company exited bankruptcy in July 2009, Automotive News reported. Plaintiffs injured before that time would have to take “old” GM to Bankruptcy Court. The chances of getting compensation in that setting are very low. (more…)

Lutz is Back at GM

"Maximum Bob" reportedly to serve as product specialist.

by on Jul.09, 2009

Old soldiers don't day, or even fade away. At least not "Maximum Bob" Lutz, who's signed on for another tour of duty with the "new" General Motors.

Old soldiers don't die, or even fade away. At least not "Maximum Bob" Lutz, who's signed on for another tour of duty with the "new" General Motors.

With General Motors set to emerge from bankruptcy, Friday, barely six weeks after filing for Chapter 11 protection, a familiar name also is set to return to the company: Bob Lutz.

Sources tell that “Maximum Bob” will take on a new role as special advisor to the company, reporting directly to Chief Executive Officer Fritz Henderson.  In February, the 77-year-old former Marine pilot announced he would relinquish his post as Vice Chairman, and then fully retire from his duties as product development chief at year’s end.

In recent weeks, Lutz had been steadily phasing down his role, spending less and less time at the automaker’s Warren, Michigan technical center, or at GM corporate headquarters, in downtown Detroit.  How much more time he will now be putting in remains to be seen.  His return will formally be announced by Henderson, during ceremonies marking the creation of the “new” GM, on Friday morning.

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Stay up on the latest GM news...and more!

Lutz is expected to serve in a broad advisory capacity, but will not directly reassume his product development portfolio, which was handed over to GM veteran Tom Stephens.