As Chrysler and GM seek the protection of bankruptcy, a number of people are being left out in the cold.  While the autoworkers’ union was consulted and, to a degree accommodated, many jobs are being cut as factories close.  The damage from such closures trickles down to parts manufacturers and many others whose livelihoods depend upon money spent by newly displaced workers.  Dealerships, some of whom were profitable, are having their doors closed.  Some of them have an inventory of vehicles with no way of selling them to their customers.  The pain is being spread far and wide, with the hope that the New Chrysler and the New GM will come back leaner, meaner and more prepared to compete with their foreign competitors.

One group of people whose plight is just being heard are the vehicle owners who were injured, or the families of those who were killed, due to defects in Chrysler and GM automobiles.  It appears the bankruptcy courts will not require the new companies to accept responsibility for these claims.  Those who have pending claims will be left at the rear of a long line of creditors seeking a piece of companies stripped of their assets.  In other words, unless the government acts to protect these victims, they will likely find themselves without a remedy.

When product liability claims were originally recognized (by courts or legislatures), the law provided a “strict liability” remedy against any person or company involved in the design, manufacture, marketing or sale of a product.  Over the past 20 years, that consumer-friendly remedy has been substantially watered down to make the cases much more difficult and expensive to win.  Additionally, many states, including Texas, have laws that protect “innocent retailers.”  Without a remedy against the manufacturer, many consumers harmed by defective products have no remedy at all.

Consumer advocacy groups are sounding off on the issue.  Clarence Ditlow, executive director of the Center for Auto Safety, said, “Either the bankruptcy system has to take care of victims or the Obama administration needs to come up with a victim’s fund much as we did in 9/11.”

As you hear the pundits toss this issue around and try to make it about “trial lawyers,” remember the people whose interests are really at stake are the victims.  These are not people who were part of “what went wrong” with the American automotive industry.  They are people who continued to “buy American” and support GM and Chrysler while many of their neighbors bought Toyotas, Hondas or Hyundais.  The federal government has indicated it will guarantee the warranties on vehicles sold by the “old Chrysler” and “old GM.”  Shouldn’t our government, in its grand restructuring plans for the automotive industry, also take care of those people who invested in these vehicles and suffered actual physical injury when one of them was defective?