GM, Michigan at Odds on Employee Program

Michigan’s attorney general has threatened to sue General Motors Corp., saying the auto maker’s employee discount program for new vehicles illegally limits how far warranty claims can be pursued. Atty. Gen. Jennifer Granholm filed a complaint saying GM’s program illegally forces warranty claims to be decided in binding out-of-court arbitration and limits the damages that can be awarded. She said if claims are filed in court, the vehicle owner could face legal action or, if they are a GM employee, even be fired. The auto maker has 10 days to respond. But GM said its program is legal, and that no employee would be fired for filing claims outside arbitration. It also said no warranty cases had been brought under arbitration since March 1, 1999, when it became mandatory. “We do not force our employees to choose this program,” said GM attorney Steve Cernak. “They get a substantial discount and, as part of that program, they agree to resolve warranty claims in this way.”