Chrysler tries to avoid product liability

May 20, 2009 11:51:40 AM PDT
The plan to revamp Chrysler through bankruptcy could backfire on consumers. If the plan is approved, current owners could lose their right to sue the carmaker for injury-causing defects.

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Chrysler filed for bankruptcy April 30th. Now three weeks later, consumer advocacy groups like the Center for Auto Safety, are pulling Chrysler managers back into bankruptcy court. They claim Chrysler is trying to avoid its responsibility to car owners who sue as a result of product liability.

"If for example you have a Chrysler and it's defective and you're personally injured as a result of the defect in the Chrysler automobile, you are out of luck," says ABC7 legal analyst Dean Johnson.

Under Chrysler's bankruptcy plan, the automaker will cover warranty issues for all new or used cars. However, lawsuits and pay outs, even if Chrysler is at fault, won't be covered.

"Potentially it could be very bad for whoever has a car, if they have no recourse with a defective car," said Kevin Hamilton, a Chrysler owner.

"Defects can happen, recalls happen every two to three years in every car," says Bsaj Kukuljevic, a Dodge owner.

The details of Chrysler's bankruptcy plan are surprising car owners. Those who came to Stevens Creek Chrysler Dodge in San Jose say they're satisfied with their short-term car repair options, but the unknowns of the long-term are unsettling.

"You try to sue them and hope for the best," said Kukuljevic.

According to Johnson, even trying to sue will be a lesson in futility.

"What Chrysler is saying is if there are any claims that arise out of any automobile that was manufactured before the bankruptcy, they're not going to honor them," says Johnson.

A federal judge will decide Chrysler's bankruptcy terms May 27th.

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