Comcast Pulls Ad After GM Challenges Its Claims

By Kendra Marr and Tomoeh Murakami Tse
Washington Post Staff Writers
Friday, June 26, 2009

Comcast pulled a cable television advertisement criticizing General Motors' bankruptcy plan earlier this week after the automaker challenged the spot's claims.

The ad was paid for by a group of people injured in GM and Chrysler vehicles, who say the taxpayer-funded restructurings should not allow the automakers to escape liability claims for injuries or deaths that occurred before the bankruptcy filings. The ad, which aired in Washington and online starting last week, showed crash tests and criticized the restructuring for throwing "consumer safety protections out the window."

Like Chrysler, GM is seeking exemption from past product-liability claims when it emerges from bankruptcy as a "new" company. As a result, the spot alleges, "Americans would have no protection if they were injured or killed by a defective GM or Chrysler vehicle from pre-bankruptcy days. Many life threatening defects would no longer be reported -- let alone fixed."

Comcast spokesman Chris Ellis said, "We have temporarily stopped airing the ad while we conduct a review of the claims it makes."

GM spokesman Greg Martin said the company is not endangering consumers. "We take our obligation very seriously to report vehicle defects and take timely corrective measures," he said.

Consumers would still be able to seek compensation from the "old" GM and Chrysler, which will remain in bankruptcy to liquidate left-over assets. But personal injury awards would probably be much smaller.

The Ad Hoc Committee of Consumer Victims of GM and Chrysler, which spent $56,000 to run the ad, said the spot was suspended Sunday. It was supposed to run until this weekend. A related group, which includes 300 members with product liability claims against GM, is opposed to the sale of the automaker, which it says would make it "free and clear of liens," including product liability claims. A hearing on the sale is scheduled for Tuesday.

On Wednesday, the committee fired back letters to GM, Comcast and the Federal Communications Commission. It wrote: "If New GM cannot be sued for defects in cars sold by Old GM then there will be far fewer claims and lawsuit data to report. Without that data, NHTSA's ability to monitor and recall vehicles will be severely hampered which puts public safety at risk. In addition, GM's financial incentive to fix defective cars will be lessened if it is no longer responsible for injuries caused by those cars."

Separately, GM yesterday received approval from a federal judge to draw on the full amount of the $33 billion in bankruptcy financing committed by the U.S. and Canadian governments -- another sign of how quickly the case, the largest bankruptcy filing by a U.S. industrial company, is proceeding. The request was approved in a matter of minutes after an attorney for the automaker informed the court that a few technical changes had been made and all objections resolved.

GM had previously won approval to access $15 billion of the loans on an interim basis. The $33 billion government loan is in addition to $19 billion GM had already received before its bankruptcy filing on June 1.

Also yesterday, U.S. Bankruptcy Judge Robert E. Gerber was scheduled to hear a request by GM to retain and pay Evercore Partners, a New York-based boutique investment bank headed by Roger Altman, a deputy U.S. Treasury secretary under President Clinton. The U.S. trustee, an agency of the Justice Department charged with monitoring bankruptcy cases, has said the proposed payment is too high. But an attorney for GM requested adjournment for another week.

Evercore and AlixPartners, a turnaround consultant that also is advising GM, have already been paid a combined $85 million prior to the bankruptcy filing, and would get another $40 million -- a "staggering" amount, the trustee said in papers filed this week.

Stephen Karotkin, a lawyer representing GM, said yesterday that the automaker had reached an agreement with the trustee to modify certain terms regarding its retention agreement with AlixPartners. For example, Karotkin said, the firm would make available more records with details of services rendered and agree that no one would bill at a higher hourly rate than Al Koch, an AlixPartners managing director and GM's chief restructuring officer.

Separately, GM is expected to announce today that it will build small cars at a Michigan plant that was to have been closed later this year, said a person familiar with the matter. The plant, in Orion Township, had been in competition with GM facilities in Janesville, Wis., and Spring Hill, Tenn. The revamped plant will be capable of building 160,000 cars annually and will employ 1,200 people. It will produce cars that are smaller than the Chevrolet Cobalt or the Honda Civic.

Staff writer Peter Whoriskey contributed to this report.

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