MAKER DEFIES REQUEST FOR JEEP RECALL
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.
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.
“It gets very heated,” she said. “They keep bringing more information they say proves there is no defect.”
In 1978, tire maker Firestone refused to recall 500 Series tires that NHTSA said were prone to tread separation, insisting at first that there was no defect. Later, it argued it could not afford to replace the tires, Claybrook recalled.
That proved a public relations disaster, with sales suffering and several top executives losing their jobs. With new leadership in place, Firestone finally agreed to initiate a recall.
In perhaps the most notorious case of all, Ford refused to recall Pintos with rear-mounted fuel tanks that could catch fire after collisions. But after being slapped with huge judgments in injury and death lawsuits, and getting pilloried in the national press, the automaker finally relented and recalled the cars, modifying the gas tanks to protect them in accidents.
“I can’t imagine why automakers resist these things,” said Claybrook, guessing that Chrysler would end up issuing a recall eventually.
As with the Pinto, Chrysler faces numerous lawsuits involving the Grand Cherokee and Liberty. The automaker’s unwillingness to issue a recall may be a legal strategy, some observers said, to avoid admitting a defect that could be used as evidence against it in court.
But that tactic could backfire if Chrysler is ultimately forced by a judge to recall the trucks, because it could make it appear the automaker allowed unsafe cars to remain on the road.
David Cole, former chairman of the nonprofit Center for Automotive Research, said Chrysler’s intransigence may simply come from its strong belief that these vehicles don’t have a defect. After all, the automaker issued 13 recalls affecting 1.3 million vehicles last year and didn’t refuse any of NHTSA’s recall requests.
“I can tell you that, in most cases, automakers don’t like to mess around,” Cole said. “You want to get this behind you just as quick as possible.”
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Times staff writer David Undercoffler contributed to this report.
