"A new lawsuit claims GM is liable to compensate millions of customers for their devalued automobiles, and owes around three times its annual earnings in compensation"
Which seems a little excessive knowing how risky an investment of a car is.
It's excessive if you look at it against their annual net income, sure, but I'm if you did the analysis on the net affect the faulty parts had on what owners would reasonably expect for future value, I'm sure it makes more sense. GM is also blaming ONE ENGINEER for this issue, so it's not like we're talking about a company that made an honest mistake--this was a problem that was actively ignored/swept under the rug for some time.
>this was a problem that was actively ignored/swept under the rug for some time. I agree and it is because of this that makes the whole thing justified. Yet, its almost impossible to know where a company/product will go in the future. If iPhones started exploding in people's pockets, I wouldn't feel the need to sue Apple because I couldnt resell my phone at the price I wanted. Granted, a faulty car against a cell phone is kind of apples to oranges, but the point is the same.
I'm not convinced that point is really the same, though. I believe the court would look at this in terms of what the customer would expect--and cars, more often than not, are resold before their usable life ends. Phones, not so much--that secondary market is more or less for people who would buy a new phone regardless of what value they got for their old one. Vehicle owners would be far more prohibited from purchasing a new vehicle without the ability to trade in their cars at a rate that fits a normal depreciation curve. I'm not an attorney so I'd be interested to hear a more educated perspective on this.
Is the US government's bailout of GM going to come into this? The US government says that it lost $11.2 Billion in the deal.
why? I mean why are they suing really? for cash? GM is a global automobile supplier what's the point of destroying the company?
why are they suing really?
-For accountability? I mean, this is a company that without the bailout of the US Govt doesn't exist. Then, they knowingly bury data that would have led most consumers to avoid their vehicles in search of a safer alternative. People died and they kept information buried. Without the kind of repercussions that actually hurt, what's to stop them and other businesses from continuing such practices?
I was unaware there were intentional cover-ups, I thought it was just their poor manufacturing, not that it would negate their liability. You're certainly right that it sends an important warning, I'm just wondering what would happen if GM actually got wiped out, maybe it's a matter of suing for just the right amount to have the desired affect.