New GM Changes Its Policies On Saturn VTi Transmissions Again

New GM has had a number of different policies for class members with failed VTi transmissions since it came into existence this summer and purchased certain assets and liabilities of Old GM.

New GM closed its deal to purchase certain assets and liabilities of Old GM on July 10, 2009. From July 10, 2009 until September 28, 2009, New GM reportedly carried on reimbursing class members with freshly failed VTi transmissions just as Old GM had--according to the terms of the VTi class action settlement. Neither Old GM nor New GM had begun paying claims on the substantial other relief that the settlement agreement required (i.e. reimbursement for past failures, towing expenses, rental car expenses, and certain past-trade in losses).

On September 28, 2009, New GM changed its mind. It sent a document entitled "Saturn VTi Transmission Settlement Clarification" to dealers advising them that New GM was no longer remedying fresh VTi transmission failures pursuant to the settlement. Instead, New GM would only honor the 5 year/75,000 mile extended warranty offered by Old GM in March 2004. Under this policy, New GM will pay 100% of the cost of repairs to your VTi transmission if the vehicle is within the 5 year/75,000 mile period when the transmission fails. New GM refers to the 5 year/75,000 mile extended warranty as "Special Bulletin 04020."

On November 5, 2009, New GM changed its mind again. On that date, New GM sent "Special Reimbursement Policy #09280" to dealers and VTi transmission owners advising them of additional relief over and above the 5 year/75,000 mile extended warranty. Special Reimbursement Policy #09280 states that those owners, whose vehicles are outside the 5 year/75,000 mile warranty, but within an 8 year/100,000 mile period, can take one of two options: 1) reimbursement for 50% of the cost of transmission repairs, or 2) a $5000 trade-in credit towards the purchase of a new vehicle manufactured by New GM.

Comparing the policies outlined above, the VTi class action settlement provides considerably more relief for many class members than the various policies that New GM is offering. The Class Representatives in the class action, through Class Counsel, have filed a second lawsuit seeking a declaration that New GM assumed Old GM's obligations under the VTi class action settlement and judgment. That lawsuit currently is being prosecuted in the bankruptcy court where Old GM filed for bankruptcy. If it is successful, class members may be entitled to the full benefit of the VTi class action settlement, but there is no guarantee of success.

With those facts in mind, we offer the following:

1. If you paid for the transmission repairs yourself because your vehicle was outside a GM warranty, but you fall within the time/mileage limits of the VTi class action settlement, then you may be eligible for reimbursement in the future if the Plaintiffs prevail in the second lawsuit. In the meantime, we are unaware of any New GM program to provide reimbursement for you.

2. If your VTi transmission fails while your car is within the 5 year/75,000 mile period, then New GM has agreed to pay 100% of the cost of repairs under Special Bulletin 04020. If the Plaintiffs prevail in the second lawsuit you may be able to recover the other relief that the VTi class action settlement provides.

3. If your vehicle is outside the 5 year/75,000 mile period but within the 8 year/100,000 mile period described in Special Reimbursement Policy #09280 when your VTi transmission fails, New GM has agreed to pay 50% of the repair costs or credit you $5,000 toward the purchase of a new GM vehicle.

If you choose to have your car repaired with New GM paying 50% of the cost, then New GM has represented to the Court that your acceptance of the 50% repair imbursement will not affect any other benefits to which you may be entitled if the lawsuit is successful. Also, if the lawsuit is successful, you may be entitled to recover the other relief provided under the Saturn VTi settlement (i.e. reimbursement for past failures, towing expenses, rental car expenses, and certain past-trade in losses).

If you choose to take the $5,000 credit toward the purchase of a new GM vehicle, then it is likely that you will not be entitled to any additional relief for that fresh failure under the Saturn VTi settlement even if the lawsuit is successful. However, if the lawsuit is successful, you may be still be entitled to recover certain other relief provided under the Saturn VTi settlement (i.e. reimbursement for additional past failures, towing expenses, rental car expenses, and certain past-trade in losses).

4. There is no guarantee that the Plaintiffs will prevail in the lawsuit to determine New GM's obligations under the VTi settlement and judgment. If they do not, then anyone who does not take advantage of the new special policy might sacrifice the ability to do so later.