What happens to Chrysler's lifetime warrenty if the company gets sold

[gotsmack]

I saw an article about Chrysler in talks of being merged with GM and was wondering what would happen to the lifetime warranty being offered?

It seems like a really time to get a Jeep if the warranty hold up because Jeep will be around longer than Dodge or Chrysler and the 08 Patriot has 2.5k cash back, might even go to 3k at year end.

Can the new owner legally choose not to honor it?

 

[Fern]

If it's a merger, the *new owner* will likely continue with all the attributes (including warrenty obligations etc) of both original companies.

Fern

 

[zerocool84]

Originally posted by: Fern
If it's a merger, the *new owner* will likely continue will all the attributes (including warrenty obligations etc) of both original companies.

Fern

Yea hopefully, if not, wait for the class action lawsuit.

 

[StageLeft]

I wouldn't worry, I imagine it will be carried on, although the chances of the entire thing going bankrupt, if that happens you will def. lose the warranty.

 

[iamwiz82]

There is very little chance anything would change because of the negative publicity.

 

[lurk3r]

Things like warranties and pensions are part of the negative equity in a company, when you buy it you assume that debt. They can try and not honor the debt, but the impact to consumer confidence would basically eliminate the company.

 

[Nyati13]

Originally posted by: lurk3r
Things like warranties and pensions are part of the negative equity in a company, when you buy it you assume that debt. They can try and not honor the debt, but the impact to consumer confidence would basically eliminate the company.

All GM would have to do is have Chrysler do a restructuring just prior to the merger. Chrysler would put all warranty service into a new shell company that would not be part of the GM merger. Then at some later date that new independent company could fail, and go into bankruptcy without effecting GM.

 

[PingSpike]

I thought that that cerebus capital group's plan was to use the impossible warrenty to pump up vehicle sales and the stock price, then sell the company while its stock price was high and shaft some one else with the all the long term costs it creates.

 

[lurk3r]

Originally posted by: Nyati13

Originally posted by: lurk3r
Things like warranties and pensions are part of the negative equity in a company, when you buy it you assume that debt. They can try and not honor the debt, but the impact to consumer confidence would basically eliminate the company.

All GM would have to do is have Chrysler do a restructuring just prior to the merger. Chrysler would put all warranty service into a new shell company that would not be part of the GM merger. Then at some later date that new independent company could fail, and go into bankruptcy without effecting GM.

And if that actually happened even more people would be buying Hondas. With their horrible auto trans reputation still well in people's minds there's no way anyone would consider Chrysler without a much better warranty than the Koreans offer.

It would definitely shift the perceived quality of the entire us market below the Koreans, several people are already claiming Hyundai make better cars than the big 3. They don't, but lots of people believe they do, I'd guess because of the huge warranties and some JD powers short term studies.

 

[halik]

It's a liability which will be transferred to the new legal entity.

 

[Arkaign]

Originally posted by: PingSpike
I thought that that cerebus capital group's plan was to use the impossible warrenty to pump up vehicle sales and the stock price, then sell the company while its stock price was high and shaft some one else with the all the long term costs it creates.

That sounds about right. Pump and dump! The American Way!