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Q&A

How GM's bankruptcy affects you

Answers about warranties, credit cards, payment, dealership closures, replacement parts, OnStar, healthcare, retiree benefits and pensions.

June 02, 2009|David Colker

With the biggest bankruptcy filing ever by a U.S. manufacturer come big questions for General Motors Corp. vehicle owners, workers and retirees.

Here are some answers:

Will my warranty be honored?

As of Monday, GM wasn't reimbursing its dealers for warranty work. But company spokesman Tom Henderson said that was only temporary. GM received approval Monday from the Bankruptcy Court to approve the issuing of warranty payments.

In the meantime, the company has asked dealers to do warranty work for consumers as usual.

"They know we will honor our warranty obligations," Henderson said.

When the company emerges from bankruptcy, it will honor both current and new warranties, he said.

Can I keep using my GM-branded credit card? What about its earnings program?

The credit cards are still valid. But the status of the earnings program, in which card users earn credits toward purchases of new vehicles, is in the hands of the Bankruptcy Court during the filing period. GM has asked the court to maintain the program.

Will replacement parts be available for GM cars?

Dealers will still have the parts. But there's no guarantee your dealer will be there for long -- the company has said it will end its relationships with nearly 2,600 dealerships by next year. About 1,100 of those dealerships already have been notified, but the list hasn't been made public.

If the dealer where I bought my car closes, will I still be able to get dealer-provided services?

GM-sponsored services, such as the warranty, remain in force, but you'll have to find another dealership where they can be fulfilled.

If you have an agreement for a service that came exclusively from your dealer (a year of free oil changes to new car buyers, for example), it might go away if your dealership shuts down.

Will OnStar service continue?

Yes. OnStar, which provides over-the-air emergency communication and navigation for many GM cars, isn't part of the bankruptcy filing.

Will the company go ahead with plans for new models?

GM says it still plans to launch several cars this year and next, including the electric Chevy Volt and several mid-sized crossovers, including the GMC Terrain.

As an employee, do I still report for work as usual?

Yes, for now. The company has asked the Bankruptcy Court to approve its continuation of pay and benefits without interruption.

But there will be hefty job losses as the company goes through what it's calling a reinvention. More than 5,000 salaried workers will be laid off, the company says, with most of the job cuts coming this year.

Will employees continue to get health benefits?

The company says it hopes the benefits will continue without interruption, but that's in the hands of the court.

How will the bankruptcy filing affect retiree benefits?

GM cars were made in Southern California into the 1990s, so the retiree question is pertinent here. For now, there will be no changes in benefits for retirees, survivors and other beneficiaries, the company says.

But there could be major changes in the near future. GM is working with the U.S. Treasury to reduce its benefit obligations to retirees by about two-thirds. That would mean cuts in healthcare and life insurance.

Can my pension be tapped by the company to help pay its debts?

That would be illegal. Federal law prohibits funds in pension plans to be used to pay creditors.

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david.colker@latimes.com

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