Taxpayer-Saved Automaker Asks Court to Bar Lawsuits Over Defective Switches

by Jim Geraghty

Aren’t we all glad that U.S. taxpayers lost $10.5 billion saving this company?

General Motors Co filed a motion in a U.S. bankruptcy court to enforce a bar on lawsuits related to ignition defects in cars sold before its 2009 bankruptcy as it fights a class action lawsuit that seeks to set aside the restriction.

The argument of General Motors is that legally, they’re the “new G.M.,” freed from the liabilities of the “old G.M.” The plaintiffs will argue that the usual bankruptcy liability protections are null and void if a company withholds key information during the bankruptcy process — i.e., the fact that they’ve made millions of cars with a potentially lethal defect.

The taxpayer bailout is being cited by the plaintiffs as a supporting argument for letting the lawsuits proceed:

GM’s argument suggests that the U.S. Government would have agreed to extend $40 billion of taxpayer money for GM’s restructuring, and supported shielding it from liability through the sale order, had it known of GM’s intentional misconduct.

(Well . . . if the whole purpose of the bailout was to help the administration’s allies in the United Auto Workers, can we really be sure that it wouldn’t?)

This morning, President Obama’s “auto czar,” Steve Rattner, who ran the bailout, was on MSNBC’s Morning Joe . . . talking about income inequality, not GM.

The Campaign Spot

Election-driven news and views . . . by Jim Geraghty.