General Motors Corp has agreed to accept liability for future product defects as one of several concessions offered in a bid to win court approval for a quick sale from bankruptcy.
In addition, GM said it would change the terms of its proposed asset sale to address objections raised by over 20 suppliers and was working to resolve a question over the future of a joint-venture plant with Toyota Motor Corp.
The statements by GM, which came in filings with a New York bankruptcy court on Friday, show how the automaker and Obama administration officials have worked to counter some of the more contentious issues raised by the company's bankruptcy filing earlier this month.
A group of nine state attorneys general, including Ohio and Connecticut, had objected to the GM reorganization brokered by the Obama administration because it would have robbed consumers of protections against product defects under state laws.
In response, GM said it would continue to pay "lemon law" claims so that consumers would be entitled to a refund or replacement for defective vehicles.
GM also said that the reorganized company, which will be effectively nationalized with a $50 billion investment from the U.S. Treasury, would assume liability for future product defect claims in a change negotiated with government officials.
"The purchaser will expressly assume all product liability claims arising from accidents or other ... incidents arising from the operation of GM vehicles subject to the closing," GM said in its court filing.
'CONSUMER VICTIMS' OBJECT
Under the GM reorganization plan, a new company would be created to buy the automaker's best assets out of bankruptcy in a deal scheduled to close by August.
The new GM would be 60-percent owned by the U.S. government, 17.5 percent by the United Auto Workers union and 11.7 percent by the governments of Canada and the province of Ontario.
A group representing about 300 Americans with lawsuits against GM for alleged product defects has objected to the reorganization since those injury and wrongful-death claims would have to be paid out from the sale of GM's mostly worthless assets.
