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NADA Responds to GM Dealer Indemnification on Air Bag On/Off Switches

27 February 1998

NADA Responds to GM Dealer Indemnification on Air Bag On/Off Switches

    WASHINGTON, Feb. 26 -- The National Automobile Dealers
Association today expressed qualified praise for General Motors'
acknowledgment of the difficult position new-car dealers are in regarding
installation of air bag on/off switches.  The manufacturer's policy does not
remove dealers from potential litigation or liability, but does clarify its
policy regarding indemnification of GM dealerships named in litigation arising
from the proper installation of the switches.  Most significantly, the
manufacturer explained that its policy applies to legal action by not only the
consumers who have the switches installed, but also by subsequent owners of
the switch-equipped vehicles.
    "Dealers are caught in the middle, between the federal government,
manufacturers and customers," said NADA Chairman Paul J. Holloway.  "GM's
policy statement provides guidance to GM dealers who want to satisfy their
customers by installing the switches in compliance with the federal
regulation.  We hope manufacturers -- and the federal government -- will help
dealers meet customer demand without increased risk of legal liability."
    Under the National Highway Traffic Safety Administration's rule, effective
Jan. 19, dealers may install switches that allow at-risk individuals to
deactivate air bags in passenger cars and light trucks in appropriate
circumstances.  Vehicle owners must receive authorization from NHTSA before
dealers can perform the work.
    The National Automobile Dealers Association represents 19,500 franchised
new-car and -truck dealers holding nearly 40,000 separate franchises, domestic
and import.

SOURCE  National Automobile Dealers Association