Changes in Detroit would have impact for drivers
WASHINGTON – President Barack Obama on Monday slammed the turnaround plans that General Motors and Chrysler have put forward to try to win more U.S. bailout cash. He called for bolder action from Detroit, which raises important questions for vehicle buyers.
Q: Should I be concerned about the warranty on my vehicle if General Motors or Chrysler filed for bankruptcy protection?
A: Consumer car analysts say the No. 1 worry of potential buyers is what happens to warranty coverage if a car company goes under. To address that, the administration Monday announced the Warranty Commitment Program, but a lot of details are unknown and not all car owners are covered.
Under the program, the government would cover all warranties on new vehicles purchased from GM or Chrysler while the company restructured. If either failed, the automaker and the government would identify warranty companies to do repair work. The guarantee would be backed primarily by taxpayer money. It would not apply to current owners of GM or Chrysler vehicles.
Jonathan Linkov, the managing editor for autos at Consumer Reports, said the warranty program should eliminate some consumer concerns, but there are still questions. He said consumers need more detail on such issues as how warranty companies would be evaluated and selected, if the warranty firms would demand upfront payments for repairs, and how the government would protect consumers against delays.
Q: What should I expect if GM or Chrysler eliminate my automotive brand or close the dealership where I get maintenance and service?
A: The administration wants deeper cuts in brands and dealerships than the car companies have suggested. Analysts say that means consumers in both rural and urban areas would be inconvenienced. For example, Linkov said Hartford, Conn., has already lost two Saturn dealerships, sending owners outside the city for service.
If your brand is purged, a sister brand might take over, analysts say. For example, if Saturn dies, service for its vehicles could still be completed by dealers at Chevrolet or other surviving branches of the GM family.
Q: What kind of cars would Chrysler make if it is swallowed by Fiat?
A: There is little doubt that fuel efficiency would become a big focus at Chrysler, an industry laggard on saving gas, said Philip Reed, the senior consumer advice editor at Edmunds.com. Fiat has been making fashionable and sporty small cars for years. He said the Italian automaker might blend nicely with Chrysler, which often gets high marks for style.
Q: What will happen to GM’s ballyhooed plug-in hybrid project, the Chevrolet Volt?
A: While members of Obama’s auto team say the forthcoming GM gas-electric vehicle holds promise, they have dinged it as potentially too pricey. New leadership at GM, ushered in at the government’s behest, might set a new course for the project.
However, Jeff Schuster, director of forecasting at J.D. Power and Associates, said it’s a little premature for Obama to give up on the Volt. “You have to start somewhere,” he said.