1. Home
  2. General Motors Forum
  3. Feds End GM/Chrysler Warranty Guarantees

Feds End GM/Chrysler Warranty Guarantees

Feds End GM/Chrysler Warranty Guarantees

formatting link
In prepared testimony before the House Judiciary Subcommittee, Car Czarlet Ron Bloom revealed that the government would no longer back GM and Chrysler warranties. ?With the successful emergence of the new companies, consumers can now feel assured that the companies have the financial wherewithal to meet their warranty commitments on a continuing basis,? Bloom said. The $641 million spent by the government on the warranty program has been returned to the Treasury with interest, reveals Bloom. ?This achievement represented a prudent short-term use of taxpayer funds,? was his conclusion. GM spokesfolks tell Automotive News [sub] that The General never even tapped the fund, while Chrysler reps are mum on the subject.

Bloom also tackled the tricky subject of the dealer cull. ?Consistent with the Task Force?s role, we were not involved in the design or implementation of New GM or New Chrysler?s dealer rationalization plans,? he said. ?We were not involved in any individual decisions about dealers, and we do not intend to be going forward.? But, but, but . . .

the companies have engaged recently with several members of Congress?including members of this subcommittee?about potential additional modifications of their review and reconsideration processes that would further increase transparency and objectivity for everyone involved. We have been supportive of this process, in our role as a facilitator, to ensure this process is transparent, fair and objective. However, the Administration strongly opposes the amendment to the Financial Services appropriations bill that attempts to restore prior Chrysler and GM franchise agreements.

Why?

Political intervention of this nature could also jeopardize taxpayer returns by making it far more difficult for the companies to access private capital markets if there is ongoing uncertainty about whether Congress will intervene to overturn judicially approved business decisions anytime that it disagrees with the judgments of the companies.

Some strong opinions there for a ?facilitator.? But Bloom clearly feels that the stakes were high enough to justify his task force?s tough stances. Not that there aren?t some signs that Bloom (or Obama) has some doubts about the intervention. Bloom concludes

In a better world, the choice to intervene would not have had to be made. But amid the worst economic crisis in three-quarters of a century, the Administration?s decisions avoided a devastating liquidation and put a stop to the long practice in the auto industry of kicking hard problems down the road. The Auto Task Force worked quickly to assist GM and Chrysler and did so in a fair and open way. While difficult for all stakeholders involved, these transactions provide New GM and New Chrysler with a new lease on life and a chance to succeed.

Ron Bloom Testimony (Treasury.gov) »

formatting link

Reply to
Jim Higgins
Loading thread data ...

Well, that will destroy a lot of confidence in these companies as they struggle to keep their heads above water.

I was on the road yesterday, and passed a brand new Chrysler, and in the window, the sticker read "Sold as is - without warranty". I was curious at the time, but now it may make sense.

Reply to
hls

If GM/Chrysler acquire a reputation for warranty repair difficulties in the coming months/year they will never shake that. It is doubtful if they are smart enough to really work hard to honor warranties, most notably have a warranty (bumper-bumper) rivaling Kia's.

Reply to
Jim Higgins

They paid $641M back from over $100T taxpayer bilking? Hey Bloom, I have some beach front property for sale, real cheap...need a government bailout, LOL.

So in a nut shell, this means GM/Chrylser purchaser before they left bankruptcy, including fleet and individuals are all screwed on the warranty. SOL, suckered, duped... but might I suggest stupid?

And neither, even together has a credit rating that is above zero. Next time they probably will go under but for good. Now that the big players are bailed out courtesty of Bailout Obama (BO), GM/Chrysler are now on their own, for however long they last.

Reply to
Canuck57

Most likely they will go under. Ticked off customer, ticked off taxpayers, brand damages in every corner. Even with $100T of taxpayers sweat the sub-zero credit rating will catch up to them. Future bond holds will not be so stupid, they will buy the asset from GM and rent it back, making it impossible for GM to skip as a welcher on debt.

Now that Bailout Obama has flushed the big wad of money into GM to bailout the influencial, doubtful a second round is coming. Congress and the senators are now getting ansy as some are up for elections and I smell a wipeout a coming. In short, the corrupt bastards are worried about their chances in 2010....

Reply to
Canuck57

The reference was to the NEW GM and Chrysler, who provide their own warranty coverage on the new vehicles they sell. The feds STILL cover those vehicles sold by the OLD GM and Chrysler, however

Reply to
Mike

But, but, but you told us they both would be liquidated in bankruptcy court. You were wrong then and you prediction will most likely be wrong as well. LOL

Reply to
Mike

They are, GM (Old), is now officially named Motors Liquidation Company.

formatting link
But you are right, with BO's (Bailout Obama) use of $100B of taxpayers wealth they started a new company called General Motors (New). Same old crappy products and crappy management. Sub-zero credit rating and sales down another 22% over last years pathetic performance, sure not looking good.

So for Government Motors (New), I predict they will need at least $20B of tax dollars each year until they go belly up. BO is going to have nothing to show for the taxpayer fraud in the next election in 2012.

Reply to
Canuck57

But if you bought one before emerging from bankruptcy, you are SCREWED. Feds have or are going to withdraw coverage, I suspect they bills were adding up. It had to happen sooner or later that GM customers get the shaft.

Lots of suppliers didn't get bailouts or paid, laying off lots of people and bankruptcies. Bond holders really got screwed. There are so many people so pissed off at GM, they are toast. Just a mater of time.

Reply to
Canuck57

One can only hope. Perhaps the ignorant voters who are only too willing to believe unbelievable promises, simply because they sound appealing, will be just a bit wiser. Not to forget the equally ignorant voters who voted for "change" without bothering to understand if change was really possible and what the definition of change really was. This guy proved himself to be a master puppeteer and he clearly knew how to pull the strings on a gullible public. Now - it's payment time.

Reply to
Mike Marlow

Not so, you are obviously confused, once again. The feds will not back up the warranties of the NEW GM and Chrysler but they will continue to back up the warranties on cars sold by the OLD GM and Chrysler

Reply to
Mike

Once again you are confused. The new GM is STILL selling more vehicles than any other manufacturer with nearly 20% share of the current down US Market, the largest market in the world. Toyota has just under 16% and Ford just over 16%

formatting link

Reply to
Mike

Mikey, the fount of all bankrupt automotive wisdom

Reply to
Jim Higgins

I have killfiled him again.

Reply to
hls

Everything I read says if you bought before bankruptcy, roll the dice to see if it is covered. Not how I spend that kind of money. But then having a cupld of bad GMs in the past, well, I learned.

Reply to
Canuck57

Old numbers. I predict by September GM will be behind at least one manufacturer for NA. Looking at the numbers, Ford and Toyota migh eclipse GM right in their back yard.

GM NA is toast.

formatting link
>

Reply to
Canuck57

Well said.

Reply to
Canuck57

formatting link
>>

641m was for warrantys during the bankrupcy procceure only, had nothing to do with the bailout money. and where do you get 100T bucks its something less than 50B, it seems with every post you up the number. you seem to be creditable on much of your posts even though they are the same thing over and over. YOU havent lost anything on the GM debacle yet I have, as a salary employee, i lost Health Care, Extended care, life insurance all that i paid into for almost 50 years. But i still want to see GM and Ford continue in business, it still means many job for us workers.
Reply to
Tom

Prove him wrong..

Reply to
Dave

Mike was wrong about GM going bankrupt. You look it up, Mike is a putz.

Reply to
Canuck57

MotorsForum website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.