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Maker Defies Request For Jeep Recall

Despite more than 50 crash deaths, Chrysler rejects U.S. regulators' claim that fuel tanks pose a safety risk.

June 05, 2013|Ken Bensinger

For two decades, some Jeep SUV models have shown an alarming tendency to burst into flames after rear-end collisions. At least 51 people have died.

On Tuesday, after a two-year investigation, federal safety regulators identified a likely cause -- defective fuel tanks -- and called for parent company Chrysler to issue a massive recall of 2.7 million vehicles. The decision marked a victory for safety advocates who have compared the Jeep fires to the 1970s crisis involving fire-prone Ford Pintos.

But in a rare act of defiance, the Auburn Hills, Mich., carmaker refused to recall the vehicles. In a strongly worded statement, Chrysler attacked the regulator's conclusions and insisted the vehicles pose no danger.

The gambit sets up a high-stakes battle between the nation's third-largest automaker and the National Highway Traffic Safety Administration. If Chrysler prevails, it could encourage more challenges from cost-conscious car companies.

For The Record
Los Angeles Times Thursday, June 06, 2013 Home Edition Main News Part A Page 4 News Desk 1 inches; 59 words Type of Material: Correction
Chrysler: An article in the June 5 Section A about Chrysler's rejection of a recall request from U.S. regulators said safety advocate Clarence Ditlow believed it would cost $1,000 per vehicle to repair alleged fuel tank problems with Chrysler's Jeep Grand Cherokee and Liberty models. In fact, Ditlow estimated it would cost $100 per vehicle to make the fix.

The financial stakes are huge for Chrysler, balancing the costs of a massive recall against the risk of litigation on behalf of injured or killed motorists. Federal regulators, for their part, must beat back a direct challenge to their typically unquestioned authority to protect the lives of motorists.

"Chrysler is taking a huge gamble here by fighting this," said Clarence Ditlow, executive director of the Center for Auto Safety, which petitioned NHTSA to open the Jeep investigation and has pressured Chrysler to repair the vehicles. "Usually these things are resolved behind closed doors."

NHTSA based its decision on an investigation launched in August 2010, after complaints by consumer advocates that the fuel tanks in some Jeep vehicles leaked and caught fire after rear-end crashes.

The agency ultimately found that the fuel tanks on 1993 to 2004 Grand Cherokees and 2002 to 2007 Liberty SUVs -- which are mounted behind the rear axle -- are significantly more likely to leak and cause fires than those on comparable vehicles.

Its analysis found that vehicles such as the Toyota 4Runner, for example, were involved in similar fatal fires at only about one-fifth the rate as the Grand Cherokee.

"Our data shows that these vehicles may contain a defect that presents an unreasonable risk to safety," David Strickland, NHTSA administrator, said in a statement. "NHTSA hopes that Chrysler will reconsider its position and take action to protect its customers and the driving public."

Chrysler denies any such defect, arguing that the vehicles meet all federal safety standards and pose no significant statistical risk.

If the automaker stands its ground, NHTSA's next move would be to formally declare a defect in the Jeeps. Should that fail to spur action, the regulator could then ask the Department of Justice to sue the automaker on its behalf to force a Chrysler recall.

Such a step is exceedingly rare. Since 1974, when Congress increased NHTSA's authority to request safety repairs, automakers have issued more than 3,000 recalls prompted by active investigations by the agency.

Automakers have refused to comply only a few dozen times, Ditlow said. Of those, only a handful ever ended up in court.

One of those cases involved Chrysler, which the government sued in 1997 over allegedly defective seat-belt anchors on 91,000 Dodge Cirrus and Stratus sedans. A federal judge ruled against the automaker and ordered a recall, slapping Chrysler with $800,000 in fines.

A year later, an appellate court overturned the ruling based on a technical interpretation of government testing procedures. But it was too late: Chrysler had already repaired the vehicles.

More typical, said Ditlow, was a decision in early 2011 by Ford to ignore a recall request for F-150 pickups with air bags that allegedly deployed inadvertently. Within months, it reversed that decision, recalling roughly 1.2 million trucks.

Ditlow believes the gas tanks caused many more deaths. Moreover, the problem could be fixed for about $1,000 a vehicle. That would cost the automaker about $150 million if about half the eligible vehicles were brought in for repair.

Conscious of the costs involved, automakers employ large staffs in Washington that cultivate relationships with NHTSA investigators, shaping and limiting how the agency defines safety defects.

When the regulator insists on a defect finding, companies strive to negotiate a mutually agreeable solution to keep costs down. During congressional hearings over Toyota's crisis with sudden acceleration recalls, a memo from 2009 was released detailing the company's efforts to negotiate a minor recall and dodge a huge repair expense. "Saved $100M+, w/no defect found," the memo said.

That savings, however, seemed insignificant compared with the public relations damage Toyota endured after it was forced to recall record numbers of vehicles worldwide.

Joan Claybrook, who served as NHTSA administrator from 1977 to 1981, said that automakers almost always push back on investigations that point to potential design flaws.

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