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Chrysler Defies NHTSA in a Classic Profits Over Safety Stance

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Earlier this month the National Highway Traffic Safety Administration (NHTSA) issued a recall on Chrysler older model Jeeps. And then last week Chrysler refused to recall the 2.7 million Jeeps at issue. The NHTSA ‘requested’ the recall—Chrysler refused. It was a gutsy move. The refusal was legal; the question is whether it was a smart move? Chrysler defended its actions, saying it planned to issue a formal letter to NHTSA explaining its stance."These cars are absolutely safe and in line with what the industry was producing at the time," Chrysler CEO Sergio Marchionne told reporters on Friday." (FoxBusiness, 6/11/2013)

Fast forward to this week: on Tuesday, June 18, Chrysler replied with a letter offering a token modification on Jeep Grand Cherokee (1993-1998) and Jeep Liberty (2002-2007), while still denying any danger. The initial response from Chrysler was to assert that there was no proof of a defect that could cause high-energy rear end collision fires. And while it is offering modifications, Chrysler is still denying serious issues with its Jeeps. Clarence Ditlow, the executive director of the Center for Auto Safety, connects five deaths – because of the fuel tank placement/defective fuel systems – to the Jeep models being investigated by the NHTSA. The government blames such collisions for the deaths of at least 51 people driving Jeep SUVs.

The problem is the fuel tank, which is mounted behind the rear axle—leaving it exposed to damage in a rear-end collision. (The next time, you are behind one of these Jeeps, just look and you will see the fuel tank, which seems to me to indicate it lacks protection). Chrysler’s solution is to install a trailer hitch, though it admits that it "cannot, and will not, mitigate the risk of the high-energy rear collisions identified in your recall request letter" and argued that "the collisions investigated by the agency were so severe that any similar vehicle would have experienced fuel leakage."

This reminds me of the comments children make when caught in the act. They blame Johnny for doing the same thing, only worse. Borderline acceptable from a 6 year old. An outrageous statement coming from the mouths of rich corporate automakers, flaunting serious safety concerns.

Reversing its previous statements, on this past Tuesday Chrysler agreed to recall 1.56 million older Jeep models for what federal safety regulators say are fire risks caused by gas tanks. This is not an admission of ‘guilt’; it’s an offer on Chrysler’s part to make a small modification to the vehicles in question. By continuing to assert the safety of their vehicles and by making this small ‘saving face gesture’ they hope to reduce potential lawsuits. It’s about public perception. It is all about money.

Here’s what Michelle Krebs, a senior analyst for auto-researcher Edmunds has to say, " …challenges may have pushed Chrysler Chief Executive Officer Sergio Marchionne to change his mind. Chrysler can’t afford to have that vehicle’s reputation damaged. It’s the heart and soul of Jeep and a source of big profit to Chrysler." (Bloomberg 6/19)

This ‘fix’ is at best, a superficial one. It is just enough of a ‘response’ to make Chrysler look like it wants to address the problem, while denying its severity. It seems to me that this trailer hitch "fix" is just another structure (which will receive tremendous energy on impact) to penetrate the fuel tank, perhaps increasing the risk of fuel leaks and fires. I hope Chrysler engineers have study and tested this "fix".

A very interesting dynamic here is the interplay between NHTSA and Chrysler. To date NHTSA hasn’t responded to this week’s letter from Chrysler. This whole issue is being played out in public; normally there is a quieter dialogue between the automaker and NHTSA when a recall is being issued. Never before has an automaker refused to comply with a recall. It is unclear what the NHTSA will do next. You can bet that all the other automakers are watching this drama.

This duel between the NHTSA and Chrysler could be setting a precedent for other automakers who don’t want to do the right thing—take absolute steps to ensure their vehicles, and customers, are safe.

For now? The consumer is being left out of this equation. How are Jeep owners supposed to respond? NHTSA Administrator David Strickland reiterated last week that the Chrysler vehicles in question have safety defects and it’s up to owners to decide whether the SUVs are safe to drive. (Bloomberg, 6/19)

That answer isn’t enough to make any Jeep driver feel safe.