Consumer groups fights for owners' rights

July 2, 2009 5:47:07 PM PDT
As two major automakers wind their way through bankruptcy, what do you do if you have an older car that has a defect? Consumer groups are worried about who is liable.

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There is concern and a little confusion. After bankruptcy, some cars will carry more protection than others, and today consumer groups called for more safeguards all the way around.

Kimberly Young of Oakland led a normal life until her Jeep Cherokee rolled over last year, snapping her spinal cord.

"Right now I'm quadriplegic, I have to be taken care of 24 hours," said Young.

Young was about to sue Chrysler saying the Jeep was defective. But then Chrysler went bankrupt. a judge ruled Chrysler isn't liable for cars it made "before" bankruptcy. Now Kimberly and other accident victims can't sue for damages.

"You could have millions of dollars in medical expenses and it would all be on you," said accident victim Rosemary Shahan.

On Thursday, consumer groups called on the federal government to protect consumers who want to make damage claims against both Chrysler and GM even though the giant automakers are in bankruptcy.

"All of us should be protected. Consumers should not be losing rights in this process," said Shanan.

GM and Chrysler will emerge from bankruptcy as two new companies. So who's responsible for the old cars?

Here's the deal and it is confusing: the new gm just agreed to cover "future" claims of defects in "old gm cars," however it will not cover any "current" claims.

Chrysler on the other hand will not cover any claims at all against its old cars. If you own a Chrysler made before the bankruptcy on May 30th, you won't be able to sue the automaker for defects.

"I think all this is going to be really confusing for consumers they are going to be going ok which car can i buy and still be protected," said Shanan.

So the groups petitioned the FTC to require a warning label on Chryslers made before May 30th. it warns if you're ever in an accident, you can't sue Chrysler, which is precisely Kimberly's situation.

"It's very hurtful. I don't know what my chances on ever being heard are. I've lost everything," said

GM declined comment on the consumer actions. Chrysler said 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. It said liquidation would have had worse consequences.

7 On Your Side contacted the FTC regarding the petition to put those warning labels on cars, and the agency said it would take that request very seriously. We'll be following this.

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