Personal Injury Law

As GM declares bankruptcy, Obama moves to reassure consumers.

By Wayne Parsons

Media outlets last night and this morning focused much of their coverage of GM's bankruptcy on the government's 60% stake in the company, and on President Obama's assurances that he wants the Federal role in GM to be temporary. In addition to generating extensive cable commentary and front-page headlines across the nation, GM's descent into bankruptcy led all three network newscasts, which devoted a combined 19 minutes and 40 seconds to the story. The CBS Evening News (12/6, lead story, 3:45, Couric) noted that GM is "now owned largely by you and me, the taxpayers." The Federal government "will take a 60% ownership stake, and the goal is to have it out of bankruptcy within 90 days." The President "sounded a bit like salesman-in-chief today -- telling Americans 'if you're considering buying a GM car, your warranties will be backed by the government.'" CBS (Mason) showed Obama saying, "Our goal is to get GM back on its feet, take a hands-off approach and get out quickly."

The New York Times (6/2, A1, Vlasic, Bunkley) reports on its front page that "Obama said the government would take a hands-off approach to managing G.M., and would divest its stock in the company as soon as it could. But that is likely years away." The Times notes that "once G.M. has finished cutting jobs, brands and models, it could fall behind Ford in terms of sales."

Chamber opposes government ownership of GM. The Financial Times (6/2, Braithwaite) reports that "the US Chamber of Commerce, the biggest business group, came out strongly against government ownership on Monday, arguing that there were already examples of undue state influence and 'clear examples of market manipulation and protectionism' at GM and Chrysler." Chamber's Thomas Donohue said "he was worried about 'the potential for governments and unions to influence production, product, workforce, and management decisions in ways that could jeopardize the automakers' chances for survival.'"

Chrysler deal approved by bankruptcy judge, Fiat protected from liability suits. The Detroit Free Press (6/1, Gardner) reported, "Chrysler's transformation from bankruptcy to a new company owned by Fiat, U.S. and Canadian taxpayers and UAW retirees, whose health care benefits could shrink in coming years, has been approved by U.S. Bankruptcy Judge Arthur Gonzalez." However, "Fiat will be protected from any product liability lawsuits arising from alleged flaws in Chrysler vehicles sold prior to the sale's closing later this month. Anyone filing such lawsuits will only be able to recover from the limited assets of the old company."

Full post as published by Honolulu Personal Injury Lawyer on June 02, 2009 (boomark / email).