Consumer Watchdog to Obama: No 'Cash for Clunkers' Without Compensation for GM Victims

Consumer Watchdog to Obama: No 'Cash for Clunkers' Without Compensation for GM
Victims

WASHINGTON, June 26 /PRNewswire-USNewswire/ -- Consumer Watchdog called upon
President Obama to prioritize the purchase of an insurance policy for victims
of defective GM vehicles in the company's bankruptcy over the
"cash-for-clunkers" program. Read the letter to the President at
http://www.consumerwatchdog.org/resources/LtrObamaReGM.pdf.

"The same $1 billion allocated for clunkers could purchase an insurance policy
in the GM bankruptcy proceeding to provide for Americans who are injured or
maimed, and the families of those killed by unsafe GM cars and trucks," wrote
Consumer Watchdog President Jamie Court. "The United States government should
make compensation for GM victims a priority before paying cash for clunkers...
While a typical bankruptcy would include successor liability - the new company
would be responsible for the defects of the old company - this special process
for GM provides no such protection for its victims. The new GM should be
required to buy an insurance policy to adequately and fully pay the claims of
consumers injured in the past and the future by GM's defective cars and
trucks."

Consumer Watchdog pointed out the inappropriate priorities in the GM
bankruptcy: $100 million for an insurance policy to protect its officers and
directors, a policy without a deductible for the executives; $2 billion per
year for GM advertising; and hundreds of millions for Wall Street advisors.

"Americans have already sunk $50 billion in GM, and analysts expect that money
will never be returned," wrote Court. "How much is there to provide for those
burned or killed by an exploding GM gas tank? Not a dime."

The consumer group also sent the President a "death memo" from the GM
litigation files showing company managers knew about defects that would burn
and kill customers but chose not to recall the cars because it was cheaper to
pay out lawsuits. Read the memo at
http://www.consumerwatchdog.org/resources/ValueAnalysisAutoFuel.pdf.

"Such cold-hearted calculations should not prove prophetic," Court wrote. "You
have it within your power as President to send a signal that those who have
suffered from these calculations are worth at least as much as an Oldsmobile
Cutlas Supreme. You simply cannot allow this injustice to stand."

Consumer Watchdog also pointed out that, "Practically, the success of
cash-for-clunkers could depend upon the purchase of insurance to cover GM
safety claims. Under the current bankruptcy filing, New GM would not be
accountable for injuries and deaths from safety defects in cars sold before
the company exits bankruptcy. If you want Americans to use their clunker
vouchers for a 2009 GM car in the short term, Americans will have to know that
if their gas tanks explode or brakes fail they won't be able to hold GM
accountable for their injuries. That's certainly not going to help GM dealers
move their inventory. Cash-for-clunkers will be far less effective in
stimulating the economy if the government vouchers purchase foreign-made cars.

"Mr. President, with the American people owning GM, it is your responsibility
to make sure there is coverage that makes good on GM's obligation to families
injured and killed by GM cars, in the past and in the future. The price tag,
in light of recent government spending on carmakers, is a small cost in order
to provide for these devastated families and uphold the cause of the justice
in America. We appreciate your attention to this matter of grave concern."

For more information about Consumer Watchdog, a nonpartisan, nonprofit public
interest group, visit http://www.consumerwatchdog.org.

SOURCE Consumer Watchdog

Jamie Court, +1-310-392-0522 ext 327, or Carmen Balber, +1-202-629-3064, both
of Consumer Watchdog