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FTC urged to put warning on Chryslers

July 03, 2009|Kendra Marr | Marr writes for the Washington Post.

Consumer groups petitioned the Federal Trade Commission on Thursday to require that Chrysler vehicles display stickers warning prospective buyers of liability risks.

The request comes after Chrysler successfully shed its obligation for past and future product liability claims on vehicles manufactured before May 30, when most of the company's assets were sold to a new company run by the Italian automaker Fiat.

Although consumers can still file claims against the "old" Chrysler, it remains in bankruptcy protection and consumers are likely to recover little, if anything.

Consumer Action, the Center for Auto Safety, the Center for Justice and Democracy, Consumers for Auto Reliability and Safety, and the National Consumers League asked the FTC to amend the "used car rule," which mandates window stickers that disclose purchasing and warranty information.

The warning would read, "This vehicle was produced prior to the date when the Chrysler bankruptcy was approved. If you buy this vehicle and are injured or killed, even if your injuries were caused by the manufacturer, you or your survivors will not be able to recover your losses by taking action against the manufacturer. If your passengers are injured or killed, even if their injuries were caused by the manufacturer, they and their survivors will not be able to recover their losses by taking action against the manufacturer."

Steven Baker, director of the commission's Midwest region, said: "The FTC received this petition. We take all these petitions very seriously and will be giving it a hard look."

Chrysler opposes the petition, saying the consumer groups had failed to uncover a "systemic defect that requires disclosure."

Chrysler spokesman Michael Palese said, "Freeing a company from vexatious litigation is part of the bankruptcy process and a means of assuring the company's viability going forward."

General Motors Corp., which is operating under bankruptcy protection, originally sought the same protections as Chrysler. But last week it made a concession. Under a deal reached with the Obama administration and several state attorneys general, GM agreed to consider claims related to cars made before the company is sold to a new entity, so long as the accident happens after the sale is completed. Claims related to accidents that occurred before the sale will remain with the "old" GM, and, as with Chrysler, plaintiffs would recover very little, if anything.

GM spokesman Tom Wilkinson declined to comment. The automaker recently asked Comcast Corp. to pull a television ad, paid for by consumer groups, which alleged that GM is endangering consumers.

Since GM and Chrysler entered bankruptcy, a number of groups have lobbied Congress and the administration to force the two automakers to accept all product liability claims.

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