It's not every day that a company agrees to take on more potential liability involving its products, but on Thursday, Chrysler did exactly that.
The newly refashioned automaker, which emerged from bankruptcy in June, will agree to consider consumer lawsuits regarding products manufactured by the old, pre-bankruptcy company. The decision allows those involved in accidents on or after June 10, but manufactured before that date, to file lawsuits involving Chrysler vehicles.
The decision is a shift from Chrysler's earlier decision to assume liability only for cars made by the new company, which is run by Italian automaker Fiat. The change in policy "is consistent with that taken by General Motors Co.," which exited bankruptcy last month.
Under the old policy, those filing claims would have been limited to seeking compensation from the assets of what remains of the old Chrysler, which has little value and is unlikely to have the ability to pay out anything.
Chrysler spokesman John Bozzella said the automaker was confident "that the future viability of the company will not be threatened if we accept these claims."
The decision is viewed as a victory by those who advocated for the change. Chrysler "responded to pressure from injured victims and consumer groups," said Joanne Doroshow, with the Center for Justice and Democracy , which wrote a letter last month asking Chrysler to reconsider its previous stance to deny product-liability claims.
Nevertheless, victims who filed personal-injury or wrongful-death suits from accidents occurring before Chrysler's February bankruptcy still can only pursue those claims against the assets of the old Chrysler, which remains in bankruptcy court.
What are Penny Stocks
The lucrative and dangerous world of penny stocks.View Course »