Chrysler Group

Chrysler Group, the U.S. automaker run by Fiat, said it would accept product liability claims on Chrysler vehicles made before the company exited bankruptcy June 10 and those involved in accidents on or after that date. Chrysler Group announced its changed policy on liability claims in a letter sent to members of Congress, the company said. Chrysler Group purchased most of the assets of the old Chrysler company, now called Old Carco, when it emerged from bankruptcy. Initially, as part of the U.S. Bankruptcy Court's approval of the purchase, Chrysler Group agreed to assume liability only for cars sold by the new company.

In the shadow of a big blue inflated gorilla perched on the roof, bright yellow signs shouted "Ultimate Liquidation Event." Deep price cuts, painted in bold neon letters, adorned the windshield of nearly every car on the Garden Grove dealership lot. Janice and Yao Huang arrived on a hot afternoon looking for a bargain. "We're here for the sale," Yao told Danny Covin as he approached, squinting in the sun. "We heard you are closing down. Do you have things on sale?"

Kimberly Young has recurring nightmares. She is rolling over and over and over, helpless, pinned inside a car. Outside Manteca, Calif., last August, the 43-year-old accountant was driving to dinner with her daughter to celebrate a promotion. Her memory of the accident is fuzzy, but she believes she swerved to avoid something, then tried to correct. She remembers hearing a horn. Her 2004 Jeep Grand Cherokee rolled over three times. The roof caved in, and her neck snapped.

For six months, General Motors Corp. and Chrysler have been trying to convince the government that they need billions of dollars in aid, while assuring the American consumer that everything is A-OK. It's proved to be the marketing equivalent of trying to stuff a Hummer into the trunk of a Corvette. The negative PR campaign appears to have reached the right ears in Washington. On Monday, President Obama will announce his plan for supporting the two automakers beyond the $17.

Past Todd's Body Shop and a crab shack, across from a field of wheat on Route 291, hangs a modest sign for Frank B. Rhodes Jr., furniture maker since 1983. Enter the metal warehouse he uses for his office, showroom and woodworking shop, and there's nothing to let visitors know that the Eastern Shore 50-year-old is one of the few remaining heirs of Walter P. Chrysler, the founder of the auto company that is now struggling to survive.

In the next seven days, General Motors Corp. and Chrysler will tell as many as 2,000 dealers they are no longer wanted. They won't go without a fight. GM, which posted a $6-billion quarterly loss Thursday, plans to notify 1,000 to 1,500 dealers early next week that it will not renew their franchises, according to company officials.

Nissan Motor Co. said Monday that it would make a new small car designed by Chrysler and that Chrysler would make a full-size pickup truck designed by Nissan. The agreement is part of a growing relationship between Chrysler and the No. 3 Japanese automaker as they try to adapt to markets buffeted by the economic slowdown and rising gasoline prices. Both products will be sold in North America, and the new Chrysler small car will also be sold in Europe and other global markets starting in 2010.

Chrysler Vice Chairman Tom LaSorda said Wednesday that his company would invest $1.8 billion to expand a Detroit assembly plant and retool it to make a new car-based sport utility vehicle. LaSorda said the money would go for tooling and a flexible body shop at the Jefferson North Assembly Plant. That plant now makes the Jeep Grand Cherokee. LaSorda said the investment would add 285,000 square feet to the plant and keep more than 400 jobs in Michigan.

General Motors Corp. and Chrysler are discussing possible alliances or a merger, after GM had previously discussed a working alliance with Ford Motor Co., according to two people familiar with the companies. A partnership between Ford and GM has been discarded for now, but Ford is exploring the possibility of the sale of part or all of its stake in Mazda Motor Corp., according to a third source.

Are the Big Three worth saving? The U.S. auto industry's downward spiral has accelerated dramatically in recent weeks. In a desperate bid for solvency, General Motors Corp. is seeking a merger with Chrysler. Chrysler has talked with Renault and Nissan about partnerships. And now Ford Motor Co., GM and Chrysler -- backed by Michigan lawmakers -- are lobbying Washington to give them cash, implying that failure to provide a bailout could doom the industry to bankruptcy.