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Old 11-10-2008, 03:25 PM   #1
dulino
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Default Will GM honor warranty in case of bankruptcy ?

I have an '08 VUE. GM is obviously going out of business by the end of next year. Who will be honoring the warranties then ?

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Old 11-10-2008, 04:20 PM   #2
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Default Re: Will GM honor warranty in case of bankruptcy ?

GM in its present format may well go bankrupt but I suspect that either one of the Asian or European automakers will step in, buy it for a song, then convert the company into a much leaner, unionless auto manufacturer that will honor warranties.
For all Canadians, you will note I spelled "honor" in the American way because the orginatior of this string is American. Didn't want you to think I didn't know the difference.

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Old 11-10-2008, 04:42 PM   #3
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Default Re: Will GM honor warranty in case of bankruptcy ?

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GM in its present format may well go bankrupt but I suspect that either one of the Asian or European automakers will step in, buy it for a song, then convert the company into a much leaner, unionless auto manufacturer that will honor warranties.
For all Canadians, you will note I spelled "honor" in the American way because the orginatior of this string is American. Didn't want you to think I didn't know the difference.
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Old 11-10-2008, 04:56 PM   #4
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Default Re: Will GM honor warranty in case of bankruptcy ?

Some VUE owners can just go to the Honda dealer...

Personally I don't think GM will be going bankrupt. The government won't allow that to happen.

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Old 11-10-2008, 08:03 PM   #5
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Default Re: Will GM honor warranty in case of bankruptcy ?

I don't think your government would sit back and let it happen. Given the current state of the US economy, letting GM go bankrupt would be disastrous.

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Old 11-10-2008, 10:45 PM   #6
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Default Re: Will GM honor warranty in case of bankruptcy ?

I highly doubt that GM will file for bankruptcy any time before your warranty expires. GM has $34 billion in cash and could free up roughly $15 billion more selling various businesses. That alone should be enough to keep the company running for a few more years. What's more, its cash-burn rate of $2 billion a quarter will slow down as a recent restructuring, which will eliminate nine factories and 30,000 workers over three years, takes hold. But, who knows.

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Old 11-10-2008, 10:56 PM   #7
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Default Re: Will GM honor warranty in case of bankruptcy ?

LOL hillarious.

GM is not going anywhere.

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Old 11-10-2008, 11:11 PM   #8
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Default Re: Will GM honor warranty in case of bankruptcy ?

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Originally Posted by acdelco View Post
I highly doubt that GM will file for bankruptcy any time before your warranty expires. GM has $34 billion in cash and could free up roughly $15 billion more selling various businesses. That alone should be enough to keep the company running for a few more years. What's more, its cash-burn rate of $2 billion a quarter will slow down as a recent restructuring, which will eliminate nine factories and 30,000 workers over three years, takes hold. But, who knows.
I agree that GM won't likely have to file bankruptcy unless they don't get a gov't bailout (like AIG keeps getting!!!), but I don't know if it's because of the cash they have. GM claims to have "dangerously low" cash and are concerned that GMAC Mortgage will not survive at all....and I think other parts also. If you go by what they are suggesting then GM does not have enough cash to make it through the end of 2009 so the idea that they have enough to keep them running for a few more years seems incorrect.

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Old 11-10-2008, 11:35 PM   #9
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Default Re: Will GM honor warranty in case of bankruptcy ?

GM (and Ford & Chrysler) may go through serious restructuring, but the idea of letting it totally sink is unlikely as others have said. The Obama administration does clearly see the implicit value of the automotive sector and knows that the big 3 can now be "encouraged" to make positive changes leading towards energy independence. There are just too many jobs directly and indirectly (millions) linked to the automotive industry to allow it to wither away and we can't just depend on foreign automakers to run this sector.

I think after everything settles out, there will be a way for the big 3 (or the remnants) to protect warranties for customers like us. After all, we and others like us are the potential buyers of the next wave of products.

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Old 11-11-2008, 07:29 AM   #10
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Default Re: Will GM honor warranty in case of bankruptcy ?

1. GM doesn't have that much cash. Look at the most recent news articles.

2. Bankruptcy doesn't mean going out of business. It meas a restructuring where they COULD sell off parts of the business but more likely they restructure, pay off debt and the most important thing, get rid of UAW contracts and legacy costs that have been killing them the last 40 years.

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Old 11-11-2008, 09:31 AM   #11
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Default Re: Will GM honor warranty in case of bankruptcy ?

First of all warranty claims are very high on the list of their creditors. The ONLY way our warranties would be voided would be a total liquidation bankruptcy, whereas GM would cease to exist. That will not happen.

Just because a company files for bankruptcy doesn't mean they are going out of business. It just means that they are allowed to reorganize with their creditors. GM is right in that it would kill customer confidence because people think that bankruptcy means the death of a company.

A total GM failure beyond a bankruptcy reorganization would have a serious impact on our economy. The government won't let that happen.

Most of the time bankruptcy is unnoticed by the customers. Circuit City, for example, is closing a bunch of stores. But aside from that, you can still shop in the remaining stores and never know they are in bankruptcy protection.

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Old 11-11-2008, 10:04 AM   #12
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Default Re: Will GM honor warranty in case of bankruptcy ?

There is no "legal" reason that GM would have to honor warraaties in the event of a Chapter 11 filing which is reorganization. I am pretty sure the court would not look at warranties as being secured. However from a practical standpoint not honoring the warranties would destroy value and that they cannot afford. I read yesterday that GM is going to halt health insurance for white collar retirees which is NOT funded. Retiree pensions are fully funded but health insurance is not so this will save them billions I would guess. In Chapter 11 they could void union contracts and in fact one of their big problems is that when they lay off workers they continue to draw 85% of their salary for an extended period. GM has far more retired workers than they have active ones, it is just killing them. January 1st of 2010 the UAW takes over healthcare for all Union retirees, getting to this date is huge for GM.

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Old 11-14-2008, 09:33 AM   #13
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Default Re: Will GM honor warranty in case of bankruptcy ?

Whether GM actually enters Chapter 11 or not, they are now in such a "preserve-cash" mode that they will continue to minimize unnecessary expenditures. Don't expect a stellar response to intermittent, difficult, or expensive warranty problems.

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Old 11-14-2008, 10:48 AM   #14
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Default Re: Will GM honor warranty in case of bankruptcy ?

I heard a rumour (rumor for our American friends) yesterday that in essence says that the various governments involved (being led by the U.S. Govt. as all firms involved are U.S. based firms) are going to let one of the Big Three fail (similar to the choice to let one of the big investment houses fail) which will put the survivors on notice that they must reorganize and turn themselves into firms that at least have a chance of turning a profit. If this involves the survivors to enter into Chapter 11 of the bankruptcy act, so be it. One must now guess which of the big three will be allowed to fail. My money is on Chrysler.
Now remember, the above is only a rumour and probably not very accurate but I guess it must be on someones table or the rumour wouldn't have started.

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Old 11-15-2008, 09:33 AM   #15
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Default Re: Will GM honor warranty in case of bankruptcy ?

Quote:
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I heard a rumour (rumor for our American friends) yesterday that in essence says that the various governments involved (being led by the U.S. Govt. as all firms involved are U.S. based firms) are going to let one of the Big Three fail (similar to the choice to let one of the big investment houses fail) which will put the survivors on notice that they must reorganize and turn themselves into firms that at least have a chance of turning a profit. If this involves the survivors to enter into Chapter 11 of the bankruptcy act, so be it. One must now guess which of the big three will be allowed to fail. My money is on Chrysler.
Now remember, the above is only a rumour and probably not very accurate but I guess it must be on someones table or the rumour wouldn't have started.
Interesting theory, but I tend to think there would be too much backlash from the displaced workers at the company that went under, particularly if it appeared intentional while the other two companies were bailed-out.

Remember, that among the constituency of the Democrats in power, the AFL-CIO, UAW, etc. unions are at the core.

Rather, I think the bail-out plans will attempt to preserve as many blue-collar jobs as possible while limiting executive compensation ... perhaps even being punitive to the execs at these companies by replacing them.

There will be "strings attached" to any bailout money ... the above will "play" much better in the media than if Obama, et al, get knocked for allowing Chrysler to fail.

my 2 cents anyway

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Old 11-19-2008, 09:34 AM   #16
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Default Re: Will GM honor warranty in case of bankruptcy ?

So, let's get back to the point.

Will our 100,000 mile warranties be honored or should those of us who are leasing consider other possibilities in a year or two ?

To add fuel to the fire -- there is a possibility of Opel getting bought out in Germany and it is not clear to me where that would leave Saturn.

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Old 11-19-2008, 10:27 AM   #17
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Default Re: Will GM honor warranty in case of bankruptcy ?

It was just announced in Canada by the CAW that they will not/not make any concessions to help save GM Canada. I think the government will now have to listen to those who are saying, why should the government take my taxes from my $20 per hour to help bail out those that are earning $75 an hour if they are not willing to help. I think the CAW just killed the hopes of a significant Canadian government rescue plan.
Re: warranties. I'm not certain of the legal status of a warranty but it seems to me that if a company goes bankrupt or at least files for bankruptcy protection the warranty is voided. Perhaps some legals are reading this forum and would like to chime in here.

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Old 11-19-2008, 11:33 AM   #18
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Default Re: Will GM honor warranty in case of bankruptcy ?

Quote:
Originally Posted by Warren View Post
It was just announced in Canada by the CAW that they will not/not make any concessions to help save GM Canada. I think the government will now have to listen to those who are saying, why should the government take my taxes from my $20 per hour to help bail out those that are earning $75 an hour if they are not willing to help. I think the CAW just killed the hopes of a significant Canadian government rescue plan.
Re: warranties. I'm not certain of the legal status of a warranty but it seems to me that if a company goes bankrupt or at least files for bankruptcy protection the warranty is voided. Perhaps some legals are reading this forum and would like to chime in here.
This is the mentality that Buzz Hargrove and the CAW have instilled upon it's membership. If GM goes down they will have had a major hand in the situation.
Greed and shortsightedness on the part of the union and plain stupidity on the part of GM have all played a major part in this mess.
I will be just as pissed as you and the rest of the tax payers if the government steps in and bails them out.

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Old 11-19-2008, 12:30 PM   #19
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Default Re: Will GM honor warranty in case of bankruptcy ?

Quote:
Originally Posted by dulino View Post
So, let's get back to the point.

Will our 100,000 mile warranties be honored or should those of us who are leasing consider other possibilities in a year or two ?

To add fuel to the fire -- there is a possibility of Opel getting bought out in Germany and it is not clear to me where that would leave Saturn.
Interesting link on that topic:

http://www.bloomberg.com/apps/news?p...&refer=germany

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Old 11-19-2008, 03:09 PM   #20
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Default Re: Will GM honor warranty in case of bankruptcy ?

This is a slight detour from the point of this thread, but I was curious....if the worse case scenario occurs would that mean that OnStar would also go extinct?

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