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Chrysler Group to remain sheltered from lawsuits

by Bill Cawthon on

Despite the agreement General Motors reached to accept future product liability lawsuits for products made and sold before it filed for bankruptcy, Chrysler Group will remain shielded from such actions. Neither company will have responsibility for currently active lawsuits. Chrysler’s were left with the “old Chrysler” which is still in Chapter 11 bankruptcy and GM’s will be handled the same way. Since damages will have to be paid out of the assets remaining in both cases, the chances for a large recovery are diminished.

The reasoning for the difference in the two companies liabilities is that the “New GM” will still incorporate much of the former company while Chrysler assets were sold to a new company operationally controlled by Fiat SpA, which has no liability for Chrysler products sold before it assumed control.

Chrysler Group spokesman Mike Palese said, “All bankruptcies are not alike, and 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.”

Bill Cawthon grew up in the auto industry in the 1950s. His Dad worked for Chrysler and Bill spent a number of Saturdays down on the plant floor at Dodge Main in Hamtramck. Bill is also the U.S. market correspondent for, a British auto industry publication, and a member of the Texas Auto Writers Association, which has named the Jeep Grand Cherokee the “SUV of Texas” several times and named the Ram 1500 as the “Truck of Texas” two years running.

Bill has owned five Plymouths (including the only 1962 “Texan”), one Dodge and one Chrysler and is still trying to figure out how to justify a Wrangler. He also has owned at least one of every 1:87 scale model of a Chrysler product. You can reach him directly at (206) 888-7324 or by using the form.

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