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Discussion Starter #1 (Edited)
"Let me say this as plainly as I can. If you buy a car from Chrysler or General Motors, you will be able to get your car serviced and repaired just like always." Obama March 30th 2009.

American consumers are protected with the Warranty Commitment Program designed by the Treasury Department. The U.S. government will establish a fund to cover costs of warranty repairs from Congress' $700 billion TARP fund.

Questions and Answers about the warranty program.

Q: What exactly is this program?

A: Starting Monday 30/3/09, consumers who purchase a new GM or Chrysler vehicle will have their warranties guaranteed. The government will finance the companies' cost to repair covered vehicles at the dealership or through a third party. The funds will be set aside in a separate federal account. The companies will provide 15 percent of their expected warranty costs, with the government covering another 110 per cent. That will be more than enough to employ a third-party firm to carry out repairs

The funds are slated to come from the government's Trouble Asset Relief Program (TARP). The Treasury wouldn't say how much money it's putting up for the program, but it's expected to be in the millions and significantly less than the $17.4 billion in bailout money the companies have already received. A separate company will be established to manage the funds and will continue to pay warranty claims

The White House says the guarantee will cover all warranties included in the manufacturer's new-car warranty. It's likely specific dealerships would be transformed into pure service centers rather than closing altogether. A third-party warranty service provider will assume responsibility for all the warranties covered by the program in exchange for the assets of the program. Plenty of legitimate claims are denied by warranty companies and the program offers no details about how the government would honor claims. At this point, the promise is grand but vague.

Q: I just purchased a car last week. Is my car covered?

A: Unfortunately, no. The plan is available for vehicles purchased during the companies' "restructuring period," which the Treasury is defining as beginning on March 30. The period will end when the companies emerge from restructuring or in other words, when they are viable without government help, or emerge from a bankruptcy.

Q: What Happens to My Auto Warranty if Jeep is Sold to Another Automaker?

A: If Chrysler sell's off its Jeep brand to another company the outcome would function in much the same way as a complete corporate buyout. The buyer would be required to purchase parts and service functions and warranties would contractually transfer to the new owner. Unlike a complete buyout, however, dealership and warranty service locations would largely stay unchanged. This is because the brand would continue to sell new vehicles, resulting in the continued necessity of most or all of current dealership outlets.

Q: What Happens to My Auto Warranty if the Company Discontinues Chrysler?

A: A discontinued vehicle brand would likely see warranty services transferred to parts and service centers at a different brand outlet. For example, when General Motors discontinued the Oldsmobile brand in 2004, warranties continued to be accepted and honored at GM dealerships. Similarly, the death of the Plymouth brand in 2001 simply required Plymouth owners to visit a Chrysler dealership to receive warranty parts and services.


In bankruptcy warranties held by current vehicle owners, or safety recalls which can occur years after the warranty expires, are uncovered affecting about 10 million to 15 million GM and Chrysler vehicles bought in the past couple years, said Clarence Ditlow, executive director of the Center for Auto Safety.




The US government also appointed former deputy labour secretary, Ed Montgomery, to coordinate government aid to communities in Michigan affected by car plant closures.
 
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Chrysler Group LLC is not liable for damages connected with vehicles manufactured and sold before May 30, 2009, when the new company was formed under the control of Fiat SpA. Any future liability claims have to be filed in bankruptcy court against the remaining assets of the old Chrysler LLC, making the potential for any financial recovery minimal at best.

Chrysler spokesman Michael Palese wrote: “In Chrysler’s bankruptcy, the ability to form a new company free from the product liability burden of the old company was essential to the new company’s survival."

Chrysler vehicles registered in the 2 months between March 30th and May 30th 2009 are warrantied by the US Government under
TARP funds.
 

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In bankruptcy warranties held by current vehicle owners, or safety recalls which can occur years after the warranty expires, are uncovered affecting about 10 million to 15 million GM and Chrysler vehicles bought in the past couple years, said Clarence Ditlow, executive director of the Center for Auto Safety.
Aleks,
An excellent note with valuable information. I completely appreciate the legal situation as to what warranties are, and are not, covered. In addition, its worth remembering that the intent exists, I believe, to service warranties whether or not actually required by the bankruptcy conditions. I haven't needed warranty service recently, but I don't have any reason to expect that I won't receive it.

In June I emailed Dodge to inquire about my dealer closing. They responded with a letter (U.S mail) notifying me that the dealership was closing. Part of the letter said, ".....we would like to suggest (the following dealerships)...... in your area that would be happy to meet all of your sales, maintenance/warranty (emphasis added) service.......needs".

Obviously, what they indicate in one letter to me is insignificant conpared to the conditions of bankruptcy, but if the time comes that they fail to honor the warranties of us millions of owners they will be dead meat to the 10th power.
 

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Discussion Starter #4
Agree with you totally. The reason for advising is not to be alarmist but sharing the information and discussing it. I do not know what it means entirely and have posted what advice was around.

My main interpretation is if you are in the market for a used 2009 Caliber buying one registered after 30/3/2009 will give you warranty coverage.
If it is a 2007 Caliber then buy from a dealer with a dealer warranty.

The Chrysler International import subsidiaries were transfered to Chrysler Group and should have their warranties honoured by FIAT.

The undertakings given in relation to support and service were that they would continue to be available but not necessarily who was going to pay for them.

The legal position in relation to older and lifetime warranties remaining with the bankrupt Chrysler LLC does introduce an uncertainty. Free warranty work by Chrysler Group is a goodwill gesture since as you say that client base is the majority of any future business.
 

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Discussion Starter #5
The Obama Administration is terminating government guarantees for new vehicle warranties. The $641 million allocated for the program, that also covered new GM vehicles, has been returned to the Treasury with interest.

Ron Bloom - Senior Advisor at the U.S. Treasury Department
(Before the House Judiciary Commercial and Administrative Law Subcommittee)
“Ramifications of Auto Industry Bankruptcies, Part II” July 21, 2009

http://financialstability.gov/latest/tg218.html

Auto Warranty Commitment Program


Toward the beginning of the restructuring process, the Auto Task Force implemented a Warranty Program to give confidence to GM’s and Chrysler’s customers during a period of substantial uncertainty regarding the outlook for the companies. With the successful emergence of the new companies, consumers can now feel assured that the companies have the financial wherewithal to meet their warranty commitments on a continuing basis. As such, the Auto Task Force determined that it was appropriate to end the Warranty Program. I am happy to report that $641 million invested in the program has been returned to United States Government along with interest payments on the program. This achievement represented a prudent short-term use of taxpayer funds.


Product liability and some workers compensation claimants will not be permitted to carry their claims forward to New Chrysler. This was a difficult decision, which New Chrysler made on a commercial basis. While everyone involved is certainly sympathetic to the hardships faced by these claimants, the company made a commercial decision quite similar to that of hundreds of other companies going through bankruptcies.

So no more government guarantee warranties, and New Chrysler ones having preference to those transferred?

At least the impression overall is that sales (of all sorts) have stopped getting worse.
 

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A quick question to anyone that can give a good answer:

Is my "lifetime" powertrain warranty still in effect?
2009 Dodge Caliber, built Oct. 28, 2008, registered in Pennsylvania April 25, 2009.

I really don't anticipate ever needing the warranty - always had good luck with American cars, but, just in case.....

Appreciate any feedback,

Thanks,

Dave K.
 

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Discussion Starter #7
:smileup:

Chrysler has issued a statement that our Calibers will have a warranty from the new Chrysler Group.

If you have been following you will be aware that Chrysler vehicles sold after 30/3/09 were warrantied by the federal government.
After the emergence of the new Chrysler Group from bankruptcy protection their sales from May 30,2009 were warrantied by the new company in partnership with FIAT.

On July 21 2009 the AutoTaskForce transferred their warranty program to the new Chrysler Group, now warrantying all sales from March 30, 2009.

GM meanwhile emerged from bankruptcy as a restructuring and continued with full warranty cover for all past and present GM Group vehicles.

Chrysler's competitive position with it's past customers and used car sales values were at a disadvantage in the market. There was also the uncertainty amongst us about our 'benefit' under warranty.
Routine warranty cover had been continuing on a non-liability basis, in law this was just goodwill.

Chrysler's financial postion is now much clearer, the inventory overhang has been converted to cash and operating costs are lower, debt interest cut, and surplus plant obligations have remained with the bankrupt Old Carco Chrysler.

Chrylser has been saying that warranty provision costs have been running below budget, their cars have been operating better than Chrysler expected them to.

By their announcement today Chrysler is accepting the obligations and liabilities relating to Chrysler vehicles manufactured in the past by the bankrupt company. This includes the remainder of 3 year warranties and the lifetime powertrain warranty.

In practice Chrysler may have wanted to do this but law requires that a full assessment of the costs and financial strength be put to the court for it's approval. Accepting liability claims for accidents and defects associated with a predecessor company could not have been allowed to jepordise the survival of the new Chrysler Group.

Chrysler Group LLC announced that the company will accept product liability claims on vehicles manufactured by Chrysler LLC (now OldCarco LLC) before June 10, 2009, and involved in accidents on or after that date. On June 10, 2009, Chrysler Group purchased substantially all of the assets of Old Carco.
"We know a lot more about the viability of our business today than when we purchased Old Carco's assets in its bankruptcy proceedings several months ago," said John Bozzella, Senior Vice President, External Affairs & Public Policy, Chrysler Group LLC. "While Chrysler Group still faces challenges, we are confident that the future viability of the company will not be threatened if we accept these claims."
OldCarco filed for bankruptcy protection on April 30, 2009. Following many complex and lengthy hearings, the bankruptcy court approved the sale of substantially all of OldCarco's assets to a newly formed company, Chrysler Group LLC. As part of the bankruptcy court-approved purchase, Chrysler Group had agreed to assume liability only for cars sold by Chrysler Group. As a result of today's announcement, Chrysler Group's approach is consistent with that taken by General Motors as part of its bankruptcy process.
"We want our customers to feel comfortable and confident buying, driving and enjoying one of our vehicles," Bozzella said. "Chrysler Group vehicles meet or exceed all applicable federal safety standards and have excellent safety records."
 
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