vB Easy Archive - What Will Happen To Chrysler Warranties If Bankrupt?

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What Will Happen To Chrysler Warranties If Bankrupt?
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Posted by: xfactors

If Chrysler goes under what will happen to all their warranties? Obama said they would be safe but where would owners take their cars for warranty service?

Posted by: crocket

Quote:

Originally Posted by TechCorp

If Chrysler goes under what will happen to all their warranties? Obama said they would be safe but where would owners take their cars for warranty service?

That's great for the US but what is going to happen to Canadians that buy or have bought a Chyrsler or GM product if they go bankrupt?

Posted by: Zeuser

Warranties are actually done by a third party. Even if Chrysler does go down, the warranties are still good.

What might be more troublesome is: where are you going to get warranty work on your car done?

Posted by: xfactors

Sounds like anyone with a used car still under warranty is going to get screwed.

Also sounds like GM is headed for bankruptcy.

http://www.cbc.ca/canada/toronto/st...ment-autos.html

CBC News
The federal government will guarantee warranties on new cars purchased from General Motors and Chrysler, Industry Minister Tony Clement said Tuesday.

The move matches a similar warranty guarantee announced last month by the government of U.S. President Barack Obama.

"We felt this was a way to assure the buyer that if you buy a GM product or if you buy a Chrysler product, your five-year warranty for parts and labour and service will be acted upon," Clement said.

The guarantee begins Tuesday and could remain in place until restructuring by the two automakers is resolved, Clement added.

He said the maximum "downside risk" for the federal government is $185.3 million "at the absolute worst-case scenario" for covering warranties.

A separate entity will be created and funded with cash from the automakers and a loan from the federal government to pay for repairs under warranty on each new vehicle sold during the restructuring period.

Clement also said the federal government will provide $700 million in extra support to Export Development Canada to support the country's auto parts sector. The money will go to insuring accounts receivable for an auto parts supplier that is selling parts to the Detroit Three.

Amid reports that GM is moving urgently on plans for a bankruptcy filing, Clement said people should prepare themselves for that possibility.

"Both the U.S. government and myself, speaking on behalf of the Canadian government, indicated that we have to look at the whole range of options now," he said.

"Clearly, we want the restructuring plans to be approved. That is our first priority and our first option, but it's not the only option, and we have to ready ourselves for other options including Chapter 11 in the United States and CCAA bankruptcy protection here in Canada."

Posted by: WaltA

Possibly things have changed, but isn't the UAW also on the hook for paying for warranty work? I thought as a measure to get line workers more involved in the quality of their own work, the automakers put into their UAW contracts, that workers will have to partially pay for warranty work. Of course, it doesn't come directly out of the worker's paychecks, but rather out of their union dues to the UAW.

Or will the UAW die with GM ???

Posted by: golden54

The UAW is going to be significantly weakened if the automakers go under. I think they will still stay around, but they will no longer call the shots. It will be nice.

Posted by: WoNGsTeR

so that means no more crazy strikes? yay!!!!!!!!

Posted by: FuzzyMaster

Hate to bore you guys with reality, but it is highly unlikely that GM or Chrysler will go completely out of business to the point that car warranties will not be covered by someone. Bankrupt means out of money not out of business. For large organizations, it usually results in restructuring & refinancing.

Filing for bankruptcy protection from your creditors (Chapter 11) is intended to allow businesses that can no longer pay their bills, an opportunity to restructure their operations and finances so that they can either become a viable business again or be acquired by other companies. The process is overseen by a bankruptcy judge or someone has been appointed by the court.

Regardless of the outcome, even if there no longer is an entity called GM or Chrysler, the court will likely ensure that car warranties are protected and that consumers aren't directly impacted. Although if a company the size of GM does go out of business, eventually, there will obviously be an impact to consumers.

Also, keep in mind that the actual warranty work is typically performed by independant dealerships. While some of them will ultimately close, many will continue to perform repairs as long as they have trained technicians and parts. Parts are mostly made by 3rd parties these days and the supply would like continue to be available for a few years at least.

There is no way to be sure of what will happen, but I wouldn't worry too much about repairs for the next few years anyways.

Posted by: golden54

I'd be surprised if either one disappeared. GM more than Chrysler. Chrysler has been on its last legs for a few years. Maybe they need to go. GM isn't going anywhere. Fuzzy is right, warranties, parts, etc. will be fine. I really wouldn't worry.