Saturn Settlement

The Choice is Yours GM — Repair or Revenge

Welcome to Saturn Settlement — the one-stop shop on how to fight back against GM.

My guess is that you're all in the same boat I am, stuck with a car that GM agreed in court to repair, but is now refusing to do so. For those unfamiliar, with the Saturn VTi transmission problems, let me bring you up to speed, no pun intended.

On April 16, 2009, after years of denial and deliberation, GM settled a class action lawsuit brought by owners of Saturn Ion and Vue models with continuously variable transmissions due to their widespread history of failure. Rather than notify the owners in accordance with the settlement agreement, GM filed for bankruptcy protection on June 1, 2009. Some 150,000 vehicles sold by Saturn between 2003 and 2005 are affected, but because GM never notified the owners, most are still unaware their transmissions could suddenly and catastrophically fail.

I found out the hard way, when mine gave out a 65mph. Only after searching online did I discovered information about the defective VTis, the class action settlement and that GM conceded in covering the cost and labor to replace or rebuild the transmission. GM has since instructed Saturn dealerships to deny the repairs the lawsuit stipulated. They now claim that the bankruptcy puts the settlement in the past and expect us to pay up to $7500 to get our Saturns running again. (Not exactly the way to persuade any of us to buy another GM car in the future.)

If GM is allowed to slither out of the bankruptcy and abandon Saturn owners, then who's next? What happens when a Cadillac conks out or a Buick breaks down? Will GM also tell them, "Sorry about your luck, but that was the old GM"?

Saturn Settlement will chronicle my struggle — our struggle — to find justice. Comments are encouraged, so add your story to mine. Along the way, if we don't find justice, we can at least organize our collective revenge against the company that has abandoned many of us on the side of road.

Tell everyone you know how GM screwed you and to seriously consider whether they are willing to trust the new GM with their warranties — or their lives.

Desperate Times and Desperate Measures

Just how desperate is GM to cover up the VTi safety issues?

They called me to buy back my car. In fact, the dealer called me, then GM legal called me — twice. I thought it was just because I was so "persistent", but it's not just me. Turns out they're actually willing to buy back 150,000 VTi transmission cars to get them off the road.

As part of a new "Special Reimbursement Policy", GM is willing to pay for 50% of the repairs on VTi transmissions, or will buy back your car for $5,000 toward the purchase of a new GM vehicle. I called the dealer to confirm as much and sure enough, that's the current offer. Add another $4,000 off for any new Saturn and another $1,000 for "Saturn Loyalty" as a returning customer, and that's $10,000 of the top of any new Saturn.

Sound too good to be true? Well, it is.

That $5,000 offer is for my Ion, which with options, mileage and condition still has a Blue Book value around $9,000. That $4,000 off any Saturn closes that gap, as does the loyalty discount. However, the least expensive new Saturn on the lot is a bare bones Aura for $23,000. So GM wants to buy my car back, but only if I'm willing to spend another $13,000 on a car to replace the $9,000 car I already own with $7500 worth of repairs that GM is only willing to half toward, even though they agreed on April 16, 2009 to pay all of it.

Confused? You should be.

But there is good news buried in the bad news — the new GM acknowledged there is a problem with the VTi transmission and that they have a financial responsibility for it. The amount is still in dispute, but the argument is clear. GM still owns this problem even after the bankruptcy.

Here are the recordings of the calls from Saturn and GM, as well as a link to internal bulletin #09280 from GM which I'm not supposed to have. (Don't ask, just listen and read.)

Saturn Buyout, 11/6/2009 @ 11:58am

GM Legal Offer, 11/9/2009 @ 11:15am

#09280: New Special Reimbursement Policy for Vehicles Equipped with Variable Transmission with Intelligence (VTi) Transmission - 50 Percent of Trans Repair Costs Paid by GM or Customer May Elect $5000 Credit

Funny how this change of policy came less than a day after a motion for summary judgement was submitted in federal court for GM to abide by the terms of the original class action settlement, or that I was called within hours of the bulletin's release?

My favorite part of the GM call was just before the 8 minute mark when Kay Reeves agreed that GM is trying to get the cars off the road. You really have to listen to her squirm after the admission fell out of her mouth.

Turn Ten Minutes and $10 Into a $10,000 Loss for GM

   

So how do you make it hurt where it counts — the bottom-line?

I may not have the $7,500 to repair my transmission, especially considering GM already agreed to pay for the costs this past April. However, that doesn't mean I can't make them pay in other ways.

Having a little grassroots activism in my repertoire of skills, I pulled together these quarter page flyers and started putting them on the windshields of newer GM cars warning the owners that the new GM is evaluating the warranties issued by the old GM on a case by case basis. You can see the front above, here's the reverse:

    Despite assurances to the contrary, General Motors Legal

    Department is summarily voiding many vehicles warranties.

    Most recently affected are the owners of 150,000 Saturns

    with a dangerous design defect, causing the transmissions

    to fail to engage or disengage — sometimes at high speeds.

    The new GM is now refusing to repair the effected cars

    under the terms of an April 16, 2009 class action settlement.

    In fact, most of the owners of these models are unaware of

    this defect until the transmissions suddenly fail. GM has also

    refused to notify effected model owners as agreed to in the

    settlement. GM dealerships are attempting to charge owners

    as much as $7500 for the repairs, even after losing the class

    action case against them and agreeing to cover the costs.

    GM justifies these actions by claiming bankruptcy protection

    against all warranty extensions agreed to in the settlement.

    If unchallenged, any owner of any GM vehicle could have 

    their warranty similarly voided, even in the instance of a

    safety recall. With the US government now owning 60% of

    the new company, let GM and Congress know this is illegal,

    unacceptable and will not be tolerated by taxpayers.

    Visit www.saturnsettlement.com to learn more, or call:

    GM Legal Department at 866-790-5600 Extension 31264

That number at the bottom? Yep, it's Kay Reeves personal extension. The case by case argument was from her mouth, so she can explain it — often, by my expectation.

Double-sided copies at nine cents a side times 50 copies makes 200 flyers for less than $10, even after sales tax. It took me maybe ten minutes of extra time hitting cars and trucks on my regular rounds to blow through all 200 — client parking lots, grocery stores, cafes and such. I took special interest in tagging Cadillacs and Hummers — the kinds of owners likely to really sweat a warranty loss.

Here's my hope. If only one in ten people who get a flyer seriously reconsider the honesty and integrity of the new GM for defying the terms of a federal court agreement, and only half of those people opt not to buy a GM vehicle in the future because of it, those numbers are pretty remarkable for no more than I spent.

One in ten out of 200 flyers is twenty people. Half of that is ten people. If GM only makes $1,000 average profit per vehicle (in all likelihood more), then those ten lost sales amount to $10,000 off GM's bottom-line. (Not to mention the costs and annoyance from anyone who calls GM Legal flipping out over whether their warranty or safety are at risk.) That's a 1000 to 1 return on my investment. Beat that Goldman Sachs — and I didn't need to ask for a taxpayer handout to pay for it either.

Already printed more flyers for myself, but don't let me have all the fun. Click on the link below and print some yourself. Front and back sides alternate, so just duplex it, cut them and you're ready to roll. Pass them along to other VTi owners, classmates and coworkers. Hit GM where it hurts.

     

GM WANTS TO VOID YOUR WARRANTY - Flyer

     

(Yes, I am using GM's logo without permission, but am doing so in the criticism of a public figure. As the law recognizes corporations as legal persons, I am simply subjecting them to the First Amendment criticism they should expect with such status. For more information about corporations as legal persons, I highly recommend the documentary "The Corporation".)

Ohio Attorney General Gets Involved

Well, a letter to your state's Attorney General may get you a call back from GM, but not a transmission.

Ohio Attorney General Richard Cordray's office forwarded my letter to him on to GM which prompted to vague, but somewhat optimistic message linked below. Sadly, after a day of frustrating phone tag, I eventually tracked down Kay Reeves with GM.

She reiterated without apology or exception the class action settlement was a matter agreed to by "General Motors Corporation" but is "not handled by General Motors Company". Asked directly if the bankruptcy was the determining factor in GM's claim that they had no legal obligation to honor the terms of the settlement, Reeves confirmed that to be the case.

Despite my pointed challenges to the assertion, GM is not prepared to budge. I even asked if GM will void all warranties for cars purchased before June 1, 2009. The company's position is that all warranty claims will be evaluated on a case by case basis. Guess that means good luck getting any service contract honored by the new GM on your old, or not so old, General Motors car.

I even asked how many people have to die for GM to reconsider leaving 150,000 unsafe vehicles on the road. GM takes no position officially, nor would Reeves personally. I wished her good luck sleeping at night. Maybe things will change once GM stops meaning "General Motors" and instead means "Guilty of Manslaughter"?

Worried about your GM warranty? Call Kay Reeves:  866-790-5600, Extension: 31264

GM AG Call, 11/2/2009 @ 11:45am  

GM AG Call, 11/3/2009 @ 2:24pm

Reinventing Fraud — The "New" General Motors

       

Let's tell Fritz Henderson not to throw VTi owners under the bus — or more accurately, our own defunct Saturns.

As the owner of two Saturns and a GM driver for more than a decade, maybe Fritz needs to seriously consider the consequences of having some of the company's most loyal customers telling everyone they know to think twice before buying any GM vehicle. If the "new" GM is allowed to ignore the warranties of VTi owners, what happens the next time a pesky or dangerous defect turns up?

If GM can selectively honor some warranties, but not others by claiming the bankruptcy wiped the slate clean, that may constitute what is legally termed "preference". Essentially, when businesses or individuals declare bankruptcy, there are restrictions against paying some creditors, but not others. If warranties for all other GM cars purchased before June 1, 2009 are recognized, GM cannot arbitrarily decide to stick it to Saturns with known transmission failures described in the original class action complaint. If GM wants out of their VTi repair agreement, they have to void all warranties — ALL OF THEM. (Let's see how that's goes over with Congress.)

Enjoy the comments to Fritz on reinventing GM — if this site was a popularity contest, he'd be sitting home on prom night. Be sure to leave your own thoughts on the class action settlement by clicking on the "mug shot" above.

For the Record, Straight From a Saturn Dealership

So I called Saturn again just to get everything I'd been told before on record.

Courteous as always, I was told that they had done the repairs on the Vti transmissions, suspiciously up until the same time Penske deal fell through. GM has since instructed Saturn dealers to ignore the class action settlement agreement.

The tech confirmed how common and dangerous the failure is and advised against driving the car. (Think the NHTSA needs to hear this call as well.)

When asked if the dealer had a copy of the settlement agreement, he said yes and offered to mail me a copy of the service bulletin confirming the defective VTi design.  Also of interest is that actual GM dealers have apparently been claiming they can't do the transmission repair, despite having the same tools, equipment and access to parts as Saturn. Guess after GM winds down the Saturn dealerships, we'll still have to beg for repairs and wonder whether the person doing it knows which end of the wrench to turn.

Doubt was expressed about supply of the VTi parts, so GM may just be running out the clock and the winners are whomever is willing and able to pay out-of-pocket. Not sure you can really call it winning if you're paying for a transmission replacement a US District Court and GM both agree should be the responsibility of the automaker to cover.

Saturn Service, 10/23/09 @ 3:18pm

How Will They Afford Their Summer Homes?

For those who missed it, GM just took a pay cut. More precisely, Kenneth Feinberg of the Treasury was offended to find out how much these clods were planning to pay themselves — essentially out of our tax dollars.

From yesterday's Detroit Free Press:

"At General Motors, cash compensation for the five most senior executives and the 20 next highest-paid employees will drop $3.9 million – or 31% – on an annualized basis, compared to 2008. In terms of total compensation, the cut will be a total of $5.6 million or slightly less than 25%."

Top execs at Chrysler, GM to see compensation cuts

"Renee Rashid-Merem, GM spokeswoman, said in a statement that the company engaged in a "collaborative and constructive review" of its compensation packages with Feinberg's office. She said GM will weight more of its compensation in stocks that are "directly tied to the company's performance, consistent with GM's long-standing compensation philosophy."

Top execs at rescued auto firms to get 25% pay cut

Chutzpah like that deserves to be punished. I think these same guys must have sold bridges and swampland before they got into the auto business. That's $5.6 million saved from only 25 executive salaries and stock options — money they planned to pay themselves, despite begging for $50 billion in government bailout money just a few months ago. Any chance they'll take some of that newly available cash and fix my transmission?

Tell Chairman Whitacre What You Think of the New GM

This guy obviously doesn't own a Saturn. We need to tell him what it's like to buy a car from a company that brags about everything they are doing for their new customers while quietly giving their existing customers the runaround.

Is this what $50 billion in taxpayer funds buys today — empty promises? How do you take a government handout while using the other hand to give some of your most loyal customers the finger?

Whitacre, New GM Chairman: "I Don't Know Anything About Cars"

Ed Whitacre may not know cars, an admission he himself made upon taking the gig, but he sure knows golden parachutes. He made a pretty sweet exit from his last job as chairman and chief executive of AT&T.

Whitacre's exit package included $74 million in nonqualified deferred compensation, $61 million from a supplemental retirement income plan and $22 million from a supplemental executive retirement plan and $1 million from another pension, according to a company filing with the Securities and Exchange Commission. The $74 million included money earned during his 44 years of service that he deferred, as well as contributions made by the company.

In addition to the $158 million payout, Whitacre could receive as much as $106 million in performance-based shares that have not yet vested, according to the SEC filing. Whitacre was to serve as consultant for three years at $1 million per year — not a bad part-time job.

Before leaving AT&T, Whitacre testified before the Senate Antitrust Subcommittee on June 23, 2006 following the BellSouth merger, but most of his questions asked by Congress were regarding the cozy relationship between AT&T and the National Security Agency's wire-tapping program. Guess he knows more about warrantless wiretapping than warranty extensions.

Ironically he was also national president of the Boy Scouts of America from 1998-2000. I'm actually an Eagle Scout myself. I always thought you were supposed to help little old ladies across the street, not leave them on the side of the road and refuse to fix the car you sold them.

Click on the photo above to hear the talking head spout happy crap about how much GM cares about its customers, is dedicated to better products and is ready for the future. Tell that to my daughter who was late to dance class tonight waiting for Mommy to get home with the Honda while our Saturn sits dead in the driveway.

GM Doesn't Even Know What Years They Made the Ion

So I got another call from GM and they now deny the 2004 Ion is even included in the VTi class action settlement.

Mick Garrett, an agent in the GM Business Resource Center, left me a message in response to my complaint to the Better Business Bureau. Apparently GM doesn't even know what model years are affected by the class action. The previously posted internal service bulletins and the first page of the notice of settlement clearly state the 2003 and 2004 Ion and 2002-2005 Vues with continuously variable transmissions are covered for repair or replacement. This guy twice stated that the 2002 and 2003 Ion were the only years covered. 

From the settlement notice:

"The class consists of all persons who are residents of the United States and who purchased a new or used 2002, 2003, 2004 or 2005 model year Saturn VUE or 2003 or 2004 model year Saturn ION equipped with a continuously variable VTi transmission…" Here's the entire six page class action settlement agreement

Click on the link below for the recording of the phone call, the first of what I suspect will be many. I'll be updating the calls as my argument over which model years are covered continues. I've got the US District of the Eastern District of California agreeing with me. I guess this guy really needs to invest in a calendar.

GM BBB Call, 10/19/09 @ 10:55am

UPDATE: Mick Garrett called back and seems to finally have his years straight, but engaged in some circuitous double-speak claiming that even though GM was the responsible party in the class action settlement, GM had no responsibility to complete the repair. He refused to give me his supervisor's contact information or transfer me to anyone else in GM's legal department.

GM BBB Call, 10/19/09 @ 1:46pm

Tell Everyone You Know — Email and Post Your Story

Big business is by default something of popularity contest — one that GM is losing.

Not much sympathy for a company that spent decades building their business around cars that were too big and too expensive for average Americans to afford. Just because the military is willing to spend a ridiculous chunk of change on a Hummer that practically measures fuel economy in yards per gallon doesn't mean that's what working class folks want or are willing to sell a kidney for to swing the downpayment. Sure, military and aerospace technology should eventually filter down to the public sector, but this isn't as simple as Silly Putty or Tang. Even domestic terrorists couldn't afford them, having to rent UHauls instead. Not much of a marketing slogan if they did though.

If you're planning to blow up a building, buy GM.

Speaking of popularity, I've also been taking my rant to Facebook to make sure all of my real and pseudo friends think twice before buying a GM vehicle. Considering Saturn was one of the few brands with any loyalty among the younger demographics, I checked to see if the company had any official or unofficial following on Facebook.

Not to my surprise they do, though it is buried among tiny, random groups that have nothing to do with GM. The official GM Facebook page can be found here:

General Motors "Official" FaceBook Group

For those on Facebook, and those waiting for an excuse to setup an account, now is the time to let other GM owners know their warranties may be at risk as well. Let's join the group and dominate the conversation. Become a "fan", then fill the wall with stories of how GM abandoned some of their most loyal customers.

Be sure to join other GM-related Facebook groups as well and spread the word. There is actually a Facebook group called "I'm for GM" that covers the Canadian perspective of GM's restructuring. Let them know north of the border how GM is screwing their American cousins.

"I'm for GM" Facebook Group

I'm still investigating whether there may be the option of getting our VTis fixed over the border. The Canadian government isn't a 60% owner in the new GM and is typically more supportive of consumer rights than the US. I'll keep you posted.

More pathetic on our side of the line is the Facebook group "Saving GM" with a whopping 218 members. That makes them only slightly more popular than venereal disease. They probably wouldn't want to turn that into a marketing slogan either.

General Motors — More Popular Than Venereal Disease, But Not As Reliable

or,

GM and VD — You Think You're Okay Now, But Just Wait a Few Years

There is a "ShareThis" link at the bottom of each rant on Saturn Settlement so you can easily email or post to most social networking services. Don't just comment here for other Saturn owners to commiserate — link to your own accounts and send them back for more information.

Let everyone you know how GM is giving you the shaft, and not the drive shaft.

The Letter Bomb — 350 Pages of Fury

The following letter was sent out in various forms to the offices of Richard Cordray, Attorney General of Ohio (my home state), Jerry Brown, Attorney General of California (the state of the class action settlement) and Beau Biden, the Attorney General of Delaware (the state of incorporation of the "new" GM).

I also dispatched letters to Senator Sherrod Brown (D-Ohio), Ralph Nader, longtime auto safety advocate and former presidential candidate and Matt Gonzalez, San Francisco attorney, prominent San Francisco public servant, attorney, activist and vice presidential candidate.

*******

I was once a loyal General Motors customer — that is until GM nearly killed me. I'm the unfortunate owner of a 2004 Saturn Ion with an ailing transmission the dealership refuses to repair, and I am not alone. In my case, the transmission failure nearly cost me my life.

This past Saturday, I was attempting to merge from 315 N onto Interstate 270 E. Exiting the entrance ramp at that interchange is often a hazard under the best conditions. As I accelerated into the right-hand lane of traffic, my car shuttered violently and lost all forward momentum. I swerved back to avoid being rear-ended by the closing traffic on 270 E, nearly sideswiping another vehicle still in the exit lane. I drifted to the side of the road unable to get the transmission to engage. After letting the car rest for a few minutes I tried again to get it into gear, ultimately having to leave it in a parking lot. I called my wife to come pick me up with our two young children who were already asleep.

I was previously unaware of the widespread failure of the VTi transmission and the safety risks it posed, but was relieved to learn, despite nearly totally my vehicle, the repair would be covered under an extended warranty class action agreement — or so I thought.

Despite GM agreeing to a class action settlement on April 16, 2009, Saturn dealerships have recently been advised to suspend all extended warranty repairs under the agreement. Saturn customer service, under direct instruction from GM, has take the position that the agreement was made by GM prior to the declaration of bankruptcy on June 1, 2009 and now has no legal obligation to complete the repairs.

GM also failed to notify the 150,000 owners of affected Vue and Ion models that due to an acknowledged design flaw, their cars might drop in or out of gear, even at high speeds, posing significant danger to operators, passengers and other motorists.

My repairs should be covered in full under the terms of the class action settlement that extended the transmission warranty to 100k miles. However, despite being at just over 94k miles, the local Saturn dealership is refusing to do the repair, quoting me a cost of $7500 for which I would be wholly responsible.

I have the letter of settlement GM agreed to on April 16, 2009, the repair estimate from the local Saturn dealer explaining they have been denying the repairs under warranty and the internal service bulletins documenting the manufacturing defect of which GM is well aware. They had been covering the repairs until a few weeks ago when the Penske purchase started to fall through — so the new, post-bankruptcy GM was in fact covering repairs, contrary to their current contention.

There is a new class action suit against GM to compel them to honor the terms of the previous settlement, but it looks like they are just trying to run out the clock and leave Saturn owners stranded, or worse still, a danger to other drivers around them. GM had 45 days from April 16, per the agreement, to notify all affected owners of the transmission issue. They instead filed for bankruptcy protection on June 1 and notified no one.

The 150,000 owners of Saturn Vue and Ion models sold between 2003 and 2005 have been stranded by GM — both financially with a repair bill that may exceed the value of their vehicle and often literally on the side of the road.

How many accidents and injuries have and will occur due to GM's lack of action? Lives likely have and will be lost due to this known defect. GM is paying roulette with the lives of its customers and the drivers who share the roads with them.

In the meantime, our five-year-old son with autism has already missed two days of school, as well as speech, physical and occupational therapies so that my wife can continue to work and ensure our only source of health insurance coverage. Our son’s complicated schedule and transportation needs between school, therapists and pediatrician appointments forced me to work for myself part-time following his autism diagnosis — income we are now lacking due to GM’s policy of denial and deception. Due to the overwhelming medical expenses not covered by our insurance, we do not have the means to pay for the repairs or purchase another car, especially considering GM had already agreed to replace the transmission under the existing settlement.

I have talked to multiple representatives of GM corporate with the same story — GM no longer recognizes the class action settlement and considers the vehicle safe. The local Saturn dealer actually offered me half the blue book value of the car in trade toward the purchase of another Saturn. With no other option, I was forced to further endanger myself in driving the car home.

GM has failed to comply with the legal terms of a class action settlement, failed to notify customers of a potentially deadly defect and failed to pay the cost of repairs they agreed in federal district court to cover. The service department even said yesterday they had another a car with the same problem last week, but the owners were forced to have it towed away for scrap, unable to pay the $7500 to repair an automobile only a few years old.

Of equal concern is whether GM can similarly dispense with any warranty or product liability on any GM vehicle purchased prior to the June 1, 2009 bankruptcy filing. Allowing GM to deny the class action settlement they committed to on April 16, 2009 would open the door to the new GM walking away from tens of millions of warranties and safety recalls, thus leaving those owners in the same dilemma faced by Saturn drivers in this case.

Following GM's bankruptcy, former CEO Rick Wagoner received a severance package of $8.15 million cash, a life insurance policy with a cash value of $2.57 million and a pension worth $74,030 every year for the rest of his life. You would think they could honor their legal obligations to Saturn owners with some of the $50 billion in federal bailout money. With the federal government now owning a 60% stake in GM by way of the bailout, that makes me as a taxpayer an owner as well. If I’m a part owner in GM, then I want my Saturn repaired.

I’ve also attached the original complaint filed against GM over the VTi transmission, the notification of the defect and settlement  issued where GM agreed to cover the costs of replacing the transmission, the internal service bulletins acknowledging the defect and my repair estimate for Saturn noting that GM now refuses to cover the repair under the extended warranty settlement.

Like many Saturn owners, I still love my car — just not GM. Everyone at the local Saturn dealership has been courteous and helpful over the years, but their hands are tied as much as mine. This is my second Saturn and I would gladly have purchased another in the future had the company not been corrupted and left to die by GM corporate. I'm not asking for much, just to have my car safe and running again and for GM to satisfy the legal agreement they made to repair the problem.

I plan to contact local and national media outlets as well regarding this matter and will advise them that the Attorney General’s office has been notified of this situation. I have also filed complaints with the Federal Trade Commission (Reference # 24316794) and the National Highway Traffic Safety Administration (Confirmation # 10287468) to investigate the danger of a defect I only became aware of after it nearly took my life.

Any assistance in my case and the similar circumstances of other Saturn owners would be greatly appreciated.