Add Impala Owners to “Hosed by GM Bankruptcy” List
It looks like there will be a new group of individuals who lose out under the General Motors bankruptcy process. GM has decided not to take responsibility for defects in Chevy Impalas that predated its bankruptcy filing. Consumeraffairs.com reports that GM has asked a court to dismiss claims relating to faulty suspensions in more than 400,000 Chevys produced for model years 2007 and 2008. GM claims that it is not their problem, since they are "New" GM and the cars were built by "Old" GM.
When the Obama Administration made a plan for GM's bankruptcy process, taxpayers and GM vehicle owners were promised that existing warranties would be honored. The implications were that defects in vehicles made by "Old" GM would be taken care of. I guess you can file this statement along with others that turned out not to be true like, taxpayers will make money on their investment (going in the wrong direction), Chevy Volt is a game changer for GM (not even close), GM has repaid its loans in full (depends on your definition of "loans"), Chevy Volt gets 230 MPG (it doesn't), China is GM's crown jewel (show me the money), Chevy Volt is a pure electric vehicle (it's a hybrid), GM has $40 billion of cash on its balance sheet (not really), Chevy Volt isn't selling because it is virtually sold out (guess again), the list seems to grow every day.
Throughout the GM bailout debacle, there have been those groups that have done well and those that have suffered. Those groups that have political pull are doing fine. Rich and powerful bankruptcy law firms have made a fortune, big investment banks cleaned up on the GM IPO, minority and woman led firms were given a cut of the pie as it was mandated that they be included in the IPO process and of course the friends of Obama at the UAW are in good shape even though they would have been decimated in any legitimate bankruptcy process.
Others were deemed to be less politically important such as GM shareholders and bondholders, closed dealerships, asbestos and accident victims, Delphi non-union retirees and now owners of defective Chevy Impalas. The powers that be must feel that there are not enough votes or money coming from these smaller groups to show them the kind of love bestowed upon the UAW. In the case of the American taxpayers that are paying more than any other group, the Obama Administrations' philosophy must be that the group is not smart enough to understand that they too are being hosed. Just keep saying what a success the bailout was and maybe they'll believe it.
One of the biggest travesties might be the lack of fair mainstream media attention given to the GM story. What are the ramifications of giving $50 billion of taxpayer funds to a major corporation, have that corporation spend hundreds of millions of dollars from that war chest on television sponsorships and then have those networks that receive the immense ad revenue be responsible (or not) to provide news (other than hype) on that same corporation? Does anyone think that the TV news coverage on GM gives a clear picture of what is transpiring? Where is the "fair and balanced" coverage? Perhaps most bizarre is the hype now being bestowed upon the new Cadillac version of the Chevy Volt after the media and America were duped on the prospects of the original. I guess the old adage, "fool me once, shame on you; fool me twice, shame on me" does not apply if enough money is involved.
I had a friend named Tom tell me that he hasn't seen anybody care that much about what happens at GM besides me. The Chevy Impala incident gives a good example of why people should be paying attention to what goes on at GM. If America's government can intrude upon private industry and manipulate who wins and loses, all Americans are at risk of being added to the list of losers, particularly if they are not a member of a politically preferred class. It seems Impala owners are learning that lesson.
Mark Modica is an NLPC Associate Fellow.