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Chrysler rejects NHTSA's request for recall of 2.7 million Jeeps
By Larry P. Vellequette, Crain News Service
WASHINGTON
(June 5, 2013) — In what some term a rare move, Chrysler Group L.L.C.
said June 4 that it does not intend to honor a request from the National
Highway Traffic Safety Administration (NHTSA) to recall as many as 2.7
million Jeep Grand Cherokee and Liberty SUVs.
NHTSA said a recall is needed to address safety problems with the vehicles' fuel systems.
Chrysler
said it had received a letter June 3 from NHTSA proposing a recall of
1993-2004 Grand Cherokee and 2002-2007 Liberty vehicles, which the
agency said have defective fuel systems that pose an unreasonable risk
to safety in rear-impact collisions.
The auto maker said in a statement that it has been sharing data on the issue with NHTSA since September 2010.
"The
company does not agree with NHTSA's conclusions and does not intend to
recall the vehicles cited in the investigation. The subject vehicles are
safe and are not defective," Chrysler said in the statement.
"We
believe NHTSA's initial conclusions are based on an incomplete analysis
of the underlying data, and we are committed to continue working with
the agency to resolve this disagreement," the statement said.
In
a related document, Chrysler argued that its analysis showed fire
incidents involving the named vehicles occurred "less than one time for
every million years of vehicle operation."
But in the
letter to Chrysler, dated June 3, NHTSA said its investigation "revealed
numerous fire-related deaths and injuries," and the agency's defect
investigation office believes that the vehicles "contain defects related
to motor vehicle safety."
The government's top auto safety official reiterated concerns about the Jeep vehicles in a statement issued late June 4.
"Our
data shows that these vehicles may contain a defect that presents an
unreasonable risk to safety, which is why we took the next step of
writing Chrysler," NHTSA Administrator David Strickland said in a
statement.
"The driving public should know that NHTSA is
actively investigating this issue and is requesting that Chrysler
initiate a safety recall and notify all affected owners of the defect.
NHTSA hopes that Chrysler will reconsider its position and take action
to protect its customers and the driving public."
Rare denial
It
is rare for an auto maker to deny a request from NHTSA for a recall,
said Allan Kam, a former senior enforcement attorney at the agency.
The
main reason is that NHTSA has the authority to order an auto maker to
recall their cars. Usually, if a car company initially refuses to recall
its cars, the company will later settle with NHTSA to minimize costs
and unfavorable publicity.
"Even if they believe in their
hearts that a safety-related defect does not exist, a manufacturer will
not get involved in a public controversy with the agency over 70,000
vehicles," Mr. Kam said. "When you're talking about millions of
vehicles, and hundreds of millions or even billions of dollars, those
are the rare occasions where a manufacturer digs in their heels."
By
refusing to recall the vehicles, Chrysler will avoid those costs for
the time being—and avoid giving legal ammunition to Jeep owners who are
suing over accidents in which their vehicles caught fire. To go along
with NHTSA's request, Chrysler would need to send Jeep owners a letter
saying their cars have a safety-related defect. Chrysler has insisted,
including in a June 4 white paper, that they do not have a defect.
"I think a jury would give such a letter a lot of weight," Mr. Kam said.
Push for recall
An influential safety advocate has been pushing for the recall.
Clarence
Ditlow, executive director of the Center for Automotive Safety (CAS),
wrote a letter to NHTSA director David Strickland in May 2012 to alert
him to the high number of most harmful event, or MHE, rear impact fire
crashes reported in 1993-2004 Jeep Grand Cherokees.
Mr.
Ditlow said testing by the Federal Highway Administration and the CAS
show that the Grand Cherokee suffered catastrophic fuel system failures
at energy levels far below NHTSA standards.
Mr. Ditlow urged NHTSA to order a mandatory safety recall if Chrysler refused to voluntarily recall the vehicle.
When reached for comment June 4, Mr. Ditlow accused Chrysler of putting profits before safety.
"When
you get right down to it, the U.S. government bailed out Chrysler.
Chrysler's since paid the money back, but there would be no Chrysler but
for the U.S. government," he said. "The way I look at it is, Chrysler
owes the American public a recall."
He also issued a scathing statement on his website.
Since September 2010
Chrysler was first notified of NHTSA's inquiry in September 2010.
The
vehicle maker so far has been subjected to about a half-dozen private
lawsuits regarding incidents with the fuel systems on the vehicle in
question. All of the lawsuits remain active and none has been settled, a
spokesman said on background.
Chrysler's analysis of NHTSA
data, which it released with its statement, found that several vehicles
from the era had higher incidence rates of fatal crashes than did the
Grand Cherokee or the Liberty.
A source, speaking on
background, said the two Jeeps exceeded the crash standard in place at
the time, which allowed for some fuel leakage in a 30 mph crash. The
Jeeps were designed to a standard that allowed no fuel leakage in a 30
mph crash.
The crash standard for rear collisions was doubled in 2008.
The
source also said that calls to move the gas tank from behind the rear
axle to a position between the axles would lower the incidence rate of
fires from rear crashes. However, doing so would increase the incident
rate of fires from side crashes, which are more prevalent, the source
said.
Chrysler has until June 18 to issue a formal reply to
NHTSA. The source indicated that the auto maker would share its
analysis with the agency, but that it couldn't conduct a recall because
it did not have a defect to fix.
In a prepared statement,
Chrysler CEO Sergio Marchionne said that safety of drivers and
passengers is the auto maker's first priority. But, he said, "the
company stands behind the quality of its vehicles. All of us remain
committed to continue working with NHTSA to provide information
confirming the safety of these vehicles."
Golden rule
Doug
Betts, Chrysler's head of quality, spoke to Automotive News last month
about the company's recalls and how it deals with consumers.
At
the time, Mr. Betts said Chrysler had issued 52 recalls of its products
during the last three years, and that 49 of those were begun by
Chrysler identifying a problem and notifying NHTSA of its intent to
carry out a recall.
In the same interview, which appeared
in Automotive News on May 27, Mr. Betts was asked whether the way
Chrysler deals with consumers had changed.
He responded:
"It's a night-and-day difference, and I'll credit Mr. Marchionne with
setting the example. He follows a very simple rule: Treat people the way
that you would want to be treated. Whenever anything comes up, he
doesn't ask how much it costs or anything. He says, 'If I were them,
would I want it fixed?' And if the answer is yes, then we fix it.
