GM Bankruptcy Creates Far Reaching Effects

Serving Los Angeles, Riverside, Ventura, San Bernardino Counties & Nearby Areas of California

On June 1, 2009, GM joined automaker Chrysler in announcing plans to enter bankruptcy. Although the Obama administration and some GM officials are hopeful that this action will bring about long-term financial health for the company, expect short-term woes to continue. A report from USA Today illustrates the effects of this decision as it propagates across the automotive industry.

Although it is not expected that GM will be sold, thus alleviating some concerns over lemon law obligations, the effects of its bankruptcy can have a far-reaching impact on auto buyers. For example, auto parts manufacturers usually make parts for several brands and models of cars. As GM slows or ceases production of cars and trucks, these parts manufacturers idle production lines. Idled production lines in turn affect the production of parts for other brands of cars.

For consumers saddled with defective vehicles, this may translate into longer, more frustrating experiences when attempting to get their cars repaired. As dealerships and repair centers close down, consumers may find that returning a vehicle is a more time consuming and costly process than it has been in the past. Erratic parts production may create long delays for owners of all car brands. Specific re-tooling for a defective part will cause considerable production delays.

While auto owners across the country could face these effects, California car owners may be hit harder by the bankruptcy of industry giants like GM. California has one of the largest markets for car sales in the United States. As the company rushes to shut down operations, the local economy suffers. Smaller parts shops and auto service stations may have to close down in the face of falling demand, thus heightening the difficulty in getting service and parts to the car buyers stuck with defective vehicles.

One bright spot in the gloomy news: Although recent sale of Chrysler to Fiat created a storm of concern from consumers, state attorneys and lemon law lawyers concerned about decisions that would shield the new owners from some or all of responsibilities mandated by state lemon laws, heavy lobbying by a coalition of states including California, led to an agreement that upheld consumers’ rights to be compensated by the manufacturer of a defective vehicle.

If you want to know more about your rights under the California lemon law or are concerned about the effects of manufacturer bankruptcy on your ability to be compensated for purchasing a defective vehicle, please contact the law offices of Howard D. Silver and discuss your situation with an experienced California lemon law attorney. Don’t hesitate to call (855) 341-2611 now to schedule your free consultation.

Posted Date: 
Wednesday, February 18, 2015