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Can of Worms: How GM's SUV Gas Gauge Settlement Could Jeopardize Chevy Impala Ruling

By Joel Arellano | October 24, 2011
We're simple folks here at Automotive.com. Our jobs consist of covering the news and writing vehicle reviews where we provide important information like seat comfort, fitting groceries next to the baby stroller in the Mini Cooper's trunk, or why someone broke a heel while rearranging the Honda Odyssey's seats. Then along comes this story. General Motors recently agreed to cover repair costs of potentially hundreds of thousands of its 2005-2007 SUVs in what looks like a settlement with the National Highway Traffic Safety Administration. That's all fine and good. Our confusion sets in because GM recently refused to settle a lawsuit by owners of the automaker's 2007-2008 Chevy Impala sedan. Here's the tangled web. Chevrolet Impala owners are suing General Motors over problems with the vehicle's rear-end suspension. According to the owners, the rear suspension rods are faulty and wear out too quickly. General Motors has countered that is has no obligation to cover such an issue because it falls under the "old GM" bailiwick, now called Motors Liquidation Corp. "New GM" states its coverage of vehicles assembled before 2009 specifically exempts it from "…old GM design choices, conduct or alleged breaches of liability under the warranty, and its terms expressly preclude money damages."The Impala issue, contends GM, is due to a design issue, not manufacturing, and absolves it from the lawsuit. So far, the courts have sided with GM. Now General Motors has announced it will cover up to half the costs to repair faulty fuel gauges in its discontinued 2005-2007 Buick Rainer, Chevrolet Trailblazer, and GMC Envoy SUVs. This agreement also covers the costs of the (also discontinued) Saab 9-7, which is based on the same SUV chassis. According to the NHTSA, which opened an investigation earlier this year, the SUVs' gas gauge provided false readings which lead to at least one accident where the SUV stalled, ran out of fuel, and was struck by other vehicles. Nearly 900,000 vehicles may be affected by this settlement. Two totally separate issues? The Chevy Impala and the Buick Rainer, Chevrolet Trailblazer, GMC Envoy, and Saab 9-7 SUVs were all assembled before the 2009 warranty agreement. We're confused as how GM can prevent Impala owners, who filed their second lawsuit against the automaker, from bringing the SUV settlement to support their case, which potentially involves more than 420,000 sedans. Automotive.com's take: Is GM opening up a can of worms settling with the NHTSA over the SUV gas gauge issue? Should "new GM" bite the bullet and settle with the Impala owners? Mike Omotoso of JD Power and Associates says GM is "splitting hairs" differentiating "old" and "new" GM, and speculates that its decision to pay part of the SUV fuel gauges repair strengthens the Impala lawsuit. On the other hand, an NHTSA investigation was never opened on the Impala, and thus the faulty suspension isn't a safety issue. We reached out to GM and contacted Michael Albano of Chevrolet Communications who says, as far as he's been told, there is no connection between the two cases. As always, share your thoughts in the comments below. Source: Detroit News
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