Jeremy Warriner lost both his legs after a collision and subsequent fire that engulfed his Chrysler Jeep Wrangler in 2005 due to an allegedly defective brake-fluid container. Terry Cole, a Missouri businessman has been confined to a wheelchair for the past 35 years, from the third-degree burns on the lower half of his body allegedly caused, by a defective seat heater in his GM Cadillac Escalade. Even if they were to successfully prove their claims, they would be left high and dry. Thanks to Section 363(f) and Section 1141(c) of the code of the Bankruptcy under chapter 11. These two well publicized cases indicate how the American taxpayers’ dollars are being spent to save mismanaged companies like Chrysler and GM and how the very tax payer has no recourse from the wrath of the defective vehicles of the said manufacturers.

Chrysler LLC has officially been sold to Italian automaker Fiat SpA (FIATY.PK: 9.81 -0.09 -0.91%). Fiat will own 20% of Chrysler initially, and could expand that stake by an additional 15% if it meets certain operational milestones. A ruling relieves the new company of responsibility for old losses.

Chrysler was sold to Fiat under Section 363 and 1141(c) of the bankruptcy code that entitles them to the following liability shields:

• Wipes out all successor liability claims against the post-bankruptcy company, even future claims
• Shifts plaintiffs and other unsecured creditors to the last in the queue to be paid by a bankrupt company, if they are to be paid at all
• Authorizes the sale of property free of all "interests" in the property
• Speaks of sales of property free and clear of all claims and interests
• New Chrysler’s earlier willingness to take over the Debtors’ obligations to millions of their vehicle owners has now become void
• Leaves Consumers and Personal Injury Victims without recourse against New Chrysler
• Products liability claims are not "interests" in property.
• Treats claims of someone injured by a defective product in the same way as would, someone with a bond
• Expects the injured person to queue up with unsecured creditors behind the secured creditors

Chrysler LLC and General Motors are being rewarded with a free pass for years of incompetence and inefficient management practices while their victims are being left powerless. Chrysler’ has to answer about 160 claims worth an estimated $600 million while the GM, about 300 claims.

The sale of the Chrysler’s assets to New Chrysler or for that matter, of GM, SHOULD RETAIN the liability to Consumers and Personal Injury Victims that arise out of alleged defects in the vehicles sold by these Debtors, for the following reasons:

• Current or future claimants, both Consumers and Personal Injury Victims, as a result of defects in the Debtors’ vehicles cannot file claims in a fair and reasonable manner
• Consumers and Personal Injury Victims, may choose to sue production and sale personnel like the dealers and suppliers, New Chrysler cannot exist without
• Dealers or the third party responsible for the consumer and personal injury liability are not competent to address litigation, sooner or later leading to endanger the survival of New Chrysler
• The cost of personal injuries, and losses, will be borne by the Consumers, the government, or insurers in the form of uncompensated care if the dealers or suppliers are not available for them
• Owners of Chrysler vehicles now/future will be possessing vehicles without anyone standing behind them, with fast depreciating resale and trade-in values
• New Chrysler will have to face media onslaught that damages the brand name and makes its survival difficult, if not impossible
• Consumers will have second thoughts about owning a New Chrysler/GM’s vehicle
• Protection of the rights of people who are sitting on a possible time bomb in the form of Chrysler or GM vehicle becomes a myth
• Skepticism runs high about the outcome of the personal injury plaintiffs and even the law's treatment of pending tort claims
• The Chrysler sale sets precedence that is obviously problematic in this context of harm to people with very serious injuries
• Sets precedence for companies in bankruptcy to follow suit
• Huge numbers of Debtors’ vehicles in the United States and the Debtors’ superior knowledge about any issues with these vehicles render it unwise to try to transfer the liability for defects in these consumer products to third parties

Plaintiffs and their families, organized by the non-profit Center for Justice and Democracy are seeking congressional action:

• To provide for these victims
• Obama administration to fashion a victim’s fund such as was done for the survivors of the 9-11 attacks
• Require both automakers purchase a retroactive insurance policy to cover past, present and future injury claims
• Set a future fund by the auto manufacturer in the likeness of asbestos claims

News was rife about GM producing its most competitive cars and trucks in decades, along with its upcoming 2011 Chevy Volt. However, all of that excitement was immediately tempered with GM's filing for bankruptcy which has come as a shock to many. The post mortem on GM has exposed the troubles of GM as infinite. Since the 1960s, GM has been mired in a combination of bad policy making, bad decision making, bad design and engineering, and of course, a lack of foresight.

A fleet of defective cars was the prime factor in bringing GM down to its knees: Since the early 1970s, GM has foisted all the defective cars on the American public and refused to stand behind their unreliable and dull cars. They did not learn lessons from Fiat, Citroen, and Renault whose unreliable vehicles disappeared from the roads in the United States. There were fewer and fewer takers for Detroit while the likes of Nissan, Honda and Toyota started offering comparable vehicles that were more reliable and included the fact that their manufacturers were willing to stand behind their vehicles.

GM did not focus on refining their production techniques for reliable cars: As early as 1980, while Toyota and others were busy refining their production techniques and producing higher quality vehicles at much lower prices, GM was automating workers out of car factories. Customers left GM's brands en masse and GM's market share fell from over 50 percent to 23 percent in 2007. Despite the quality gap that has narrowed considerably in recent times, wooing those customers back has been an uphill process to say the least. GM’s crossover, the 2001 Aztec, didn't help either.

Blame it on the bad policy making, bad decision making, bad design and engineering, and of course, a lack of foresight: While Toyota has improved all its models and created two new divisions in the United States in the last 15 years, GM could not create anything half as good as Toyota’s Lexus and Scion; Honda’s Acura; Nissan, and Infinity and the models from Mercedes, BMW and Audi. Hyundai arrived in the US much later than GM, but has earned the North American Car of the year for its elegantly designed and reliable, Genesis. And GM had nothing to boast of, except the mass produced unsafe, low-mileage, oversized inferior SUV's people have come to loath. If GM had stopped squandering on lobbying against consumer safety and environmental issues and had allotted even 1/10th of its advertising fund for creating and improving the design of its vehicles, GM would have been in a position to produce at least one good vehicle model a year. Instead, while GM was producing some of the auto industry's worst vehicles such as the Chevy Vega, a hundred miles away in Marysville, Ohio, Honda was busy producing world class automobiles and motorcycles. Nobody should blame the unions for this disparity. It's the GM management that has to answer for its bad policy making, bad decision making, bad design and engineering, and of course, a lack of foresight.

GM's vehicles are all over priced: GM's vehicles are all over priced even with incentives. The interest rates are high too. And the vehicles all look like copy cat cars and trucks of another manufacturer but lack the elegance and reliability to tempt customers into buying them. Despite the knowledge that American cars are costly and unreliable, GM has not reformed its ways to build better vehicles to compete with the other manufacturers.

GM had nothing but bad design and low quality vehicles to offer the customer: The signs of bad manufacturing that would scare any prospective buyer are all present at GM. These include but are not limited to: Doors being misaligned with gaps at the bottom, B pillar narrowing to a skinny gap at the top, inferior brake pads, air leaks on seals around doors, bumpy rides, claustrophobic interiors, skinny seating, cramped leg room, low head room for the tall, tiny sounding doors and mis-fitting parts welded on the under carriage. Nobody in their right mind would bring themselves to purchasing these cars that broke down and are mere junk at 90,000 miles, while small Toyota and Honda vehicles would keep going with half the fuel offered tempting alternatives.

Energy Crunch and Demand Shift : GM had relied on SUVs and trucks for profits. A rise in energy prices had a major impact on GM’s profitability. Customers started opting for smaller, less expensive and fuel efficient cars. GM had to deal with a loss of revenue and the piled up trucks that guzzled fuel. Only two things kept GM afloat; the cheap imported oil and the artificially depressed interest rates.

Financial Meltdown: The auto industry and its customers rely on credit. When access to car loans or leases is limited, sales fall off a cliff. And many analysts believe the total for 2008 could be as low as 10 million, the lowest in more than a decade.

Legacy Costs: The costs of providing healthcare and pensions to scores of retired workers and their dependents, $2000 a car goes into the sticker price of any new GM car and truck. Honda, Toyota and others do not have these costs. GM's per-hour labor rate for car assembly is about $75 per hour while it is $40 to $45 for other car companies.

Global Slowdown: GM operates in 41 countries and the financial malady has spread across the globe like a wild fire. Sales are down everywhere which has meant that GM has many wounds and it is bleeding from all of them. On the cost side, the market slowdown has closed many of its factories and has removed most of the industry's overcapacity of cars and trucks.

Today, with nothing but a questionable $40,000 commuter car that may or may not even get onto the road; it is no surprise that GM has already set the stage for its exit. If by any remote chance, a new labor agreement kicks in, GM may be able to produce a less expensive car and can once again get stable with profits. But then, the million dollar question is ‘Will GM still be around?’ Will their lemon vehicles also be around?

General Motors Corp. took a key step toward its downsizing on Tuesday, striking a tentative deal to sell its Hummer brand to a Chinese manufacturer, while also revealing that it has potential buyers for its Saturn and Saab brands.

GM has an agreement to sell its Hummer brand to Sichuan Tengzhong Heavy Industrial Machinery Co. of China, said a person briefed on the deal.

The Detroit automaker announced Tuesday morning that it had a memorandum of understanding to sell the brand of rugged SUVs, but it didn't identify the buyer. A formal announcement of the buyer was to be made Tuesday afternoon, said the person briefed on the deal. The person spoke on condition of anonymity because the details have not been made public.

Sichuan Tengzhong deals in road construction, plastics, resins and other industrial products, but Hummer would be its first step into the automotive business.

GM said the sale will likely save more than 3,000 U.S. jobs in manufacturing, engineering and at various Hummer dealerships.

As part of the proposed transaction, Hummer will continue to contract vehicle manufacturing and business services from GM during a transitional period. For example, GM's Shreveport, La., assembly plant would continue to contract to assemble the H3 and H3T through at least 2010, GM said.

The automaker also said Tuesday that it has 16 buyers interested in purchasing its Saturn brand, while three parties are interested in the Swedish Saab brand.

Chief Financial Officer Ray Young told reporters and industry analysts on a conference call that GM is continuing to pursue manufacturing agreements with a new Saturn buyer.

GM would like to sell the money-losing Saturn brand's dealership network, contracting with the new buyer to make some of its cars while the buyer gets other vehicles from different manufacturers.

At the same time, bridge loan discussions with the Swedish government are progressing, Young said.

GM, which filed for Chapter 11 bankruptcy protection in New York on Monday, is racing to remake itself as a smaller, leaner automaker. In addition to its plan to sell the Hummer, Saab and Saturn brands, GM will also phase out its Pontiac brand, concentrating on its Chevrolet, Cadillac, Buick and GMC nameplates.

The company hopes to follow the lead of fellow U.S. automaker Chrysler LLC by transforming its most profitable assets into a new company in just 30 days and emerging from bankruptcy protection soon after.

But GM is much larger and complex than its Auburn Hills-based rival and isn't up against Chrysler's tight June 15 deadline to close its deal with Fiat Group SpA.

Sharon Lindstrom, managing director at business consulting firm Protiviti, said the companies pose different challenges. But as with Chrysler, she notes that the Treasury Department made sure many of GM's moving parts were in order ahead of time so a quick bankruptcy reorganization might be possible.

"They had a lot of their ducks in a row because the terms of the government financing forced them to get all the parties to the table in a very, very short period of time," Lindstrom said.

Separately, the German government said Tuesday it paid out the first euro300 million ($425 million) in bridge loans to GM's Adam Opel GmbH division. The loans are part of a deal to shrink GM's stake in Opel and shield it from GM's bankruptcy protection filing in the U.S.

Canadian auto supplier Magna International Inc. and Russian-owned Sberbank will acquire 55 percent of Opel.

A sale of the Hummer brand had been expected. Chief Executive Fritz Henderson had said in April that the automaker was expecting final bids from three potential buyers within the month.

Critics had seized on the rugged but fuel-inefficient Hummer as a symbol of excess as GM's financial troubles grew and gas prices rose. Sales at Hummer, which is known for models with military-vehicle roots, have been in a steep slide since gasoline prices rose to record heights last summer. For the first four months of this year, Hummer sales are down 67 percent.

GM nailed down deals with its union and a majority of its bondholders and arranged the Opel deal in order to appear in court Monday with a near-complete plan to quickly emerge with a chance to become profitable.

The government has said it expects GM to come out of bankruptcy protection within 60 to 90 days. By comparison, the judge overseeing Chrysler's case approved the sale of its assets to a group led by Italy's Fiat in just over a month. Some industry observers think Chrysler could emerge as early as this week.

During Monday's hearing, GM attorney Harvey Miller stressed the magnitude of the case and the importance of moving GM through court oversight as fast as possible. He noted that the automaker only has about $2 billion in cash left.

"If there's going to be a recovery of value, it's absolutely crucial that a sale take place as soon as possible," Miller said in his opening statement.

The automaker wants to sell the bulk of its assets to a new company in which the U.S. government will take a 60 percent ownership stake. The Canadian government would take 12.5 percent of the "New GM," with the United Auto Workers union getting 17.5 percent and unsecured bondholders receiving 10 percent. Existing shareholders are expected to be wiped out.

U.S. Judge Robert Gerber moved swiftly through more than 25 mostly procedural motions during the automaker's first- day Chapter 11 hearing.

Gerber set GM's sale hearing for June 30, putting it on a path similar to that of Chrysler. Objections are due on June 19, with any competing bids required to be submitted by June 22.

Gerber also gave GM immediate access to $15 billion in government financing to get it through the next few weeks, and interim approval for use of a total $33.3 billion in financing, with final approval slated to be ruled on June 25. The funds are contingent on GM's sale being approved by July 10. Gerber also approved motions allowing the company to pay certain prebankruptcy wages, along with supplier and shipping costs.

The sheer size of GM makes it a more complicated case than Chrysler.

GM made twice as many vehicles as Chrysler's 1.5 million last year and employs 235,000 people compared with Chrysler's 54,000. GM also has plants and operations in many more countries, meaning it will likely have to strike separate deals to navigate the bankruptcy laws of those places.

Henderson said GM has learned a few things by watching Chrysler's case.

"Certainly the court showed that it can address 363 (sale) transactions in an expeditious fashion," Henderson said at a news conference Monday. "Particularly in our case with what will be a very large 363 transaction."

GM's filing for Chapter 11 bankruptcy protection is the largest ever for an industrial company. GM, which said it has $172.81 billion in debt and $82.29 billion in assets, had received about $20 billion in low-interest loans before entering bankruptcy protection.