Chrysler expected to formally refuse Jeep recall

Chrysler is expected to file papers Tuesday explaining why the automaker refuses to recall millions of older Jeeps

Published On: Jun 18 2013 12:22:01 AM EDT   Updated On: Jun 18 2013 07:49:50 AM EDT
DETROIT -

In one of the biggest-ever showdowns between an automaker and the government, Chrysler on Tuesday is expected to file papers explaining its refusal to recall 2.7 million older Jeep SUVs that are at risk of catching fire in rear-end collisions.
 
The government says 51 people have suffered fiery deaths in Jeep Grand Cherokees and Libertys with gas tanks mounted behind the rear axles. But Chrysler is expected to stick to its contention that the SUVs are as safe as similar vehicles on the road. The Jeeps, it says, met all federal safety standards when they were built, some more than two decades ago.
 
Car companies rarely spar publicly with the National Highway Traffic Safety Administration, the agency that monitors auto safety. The last time an automaker denied a NHTSA recall request was early in 2011, when Ford said calling back 1.2 million pickup trucks for defective air bags wasn't justified. Ford later agreed to the recall after NHTSA threatened to hold a rare public hearing on the issue.
 
NTSHA could employ the same tactic in the Jeep case. The Jeep dispute ultimately could be decided in federal court.
 
NHTSA began investigating the SUVs three years ago at the behest of Clarence Ditlow, director of the Center for Auto Safety, an advocacy group.
 
Earlier this month, NHTSA sent a letter to Chrysler asking it to voluntarily recall Grand Cherokees from 1993 through 2004 and Libertys from 2002 through 2007. The plastic gas tanks, the government said, can rupture when hit from behind, spilling fuel and causing deadly fires.
 
Chrysler responded publicly, saying in a statement that it "does not intend to recall the vehicles." The car company must file its formal response to the request on Tuesday.
 
Chrysler Group LLC, which is majority-owned by Italy's Fiat SpA, said that the Jeeps are among the safest vehicles of their era. It accused NHTSA of holding the company to a new standard for fuel tank strength.
 
Chrysler moved gas tanks on the Grand Cherokee in front of the rear axle in 2005, and did the same thing with the Liberty in 2007.
 
Strengthening the structure around the gas tanks of the older Jeeps, likely the lowest-cost option, would be costly. Relocating them ahead of the axle would cost even more.
 
Ditlow says the problem could be solved for $100 per vehicle by bolting a metal gas tank shield to the frame, adding a fuel tank check valve to stop leaks and making the tank's hose longer so it won't be pulled from the tank in a crash.
 
Even that solution would cost Chrysler $270 million, about one-sixth of the company's profit last year.
 
While both sides appear stuck in their positions, David Kelly, former acting NHTSA administrator under President George W. Bush, says he expects the matter to be settled before a public hearing takes place.
 
"I think cooler heads will eventually prevail," says Kelly, adding that neither side wants the matter aired in public. "Chrysler doesn't want to have a hearing with a bunch of people who have been in crashes and have lost family members," he says.
 
But Kelly expects a lot of posturing before any settlement is reached.