Chrysler Refuses to Comply with NHTSA Recall Request
In a highly unusual move, DaimlerChrysler has refused to comply with a voluntary recall request by the National Highway Traffic Safety Administration (NHTSA). Although manufacturers have some discretion in the matter, such a move invites public relations problems and possible lemon law or other product claims from owners who experience the defects.
The particular recall in question involves 2.7 million 1993-2004 Jeep Grand Cherokee and 2002-2007 Jeep Liberty models. NHTSA contends the engine placement could lead to greater chance of fire during rear-end collision, with increased risk of related injuries and deaths. Chrysler denies the charges and CEO Sergio Marchionne claims, "These cars are absolutely safe and in line with what the industry was producing at the time."
NHTSA issues recalls regularly, for a variety of defects large and small. Kemnitzer, Barron & Krieg receives these weekly. This week, for example, we learned of investigations and recalls involving brake fluid in the 2010 Toyota Lexus (NHTSA Campaign ID Number : 13V235); possible transmission fluid leak in the 2012-2013 Chrysler Jeep (NHTSA Campaign ID Number : 13V234); air bag deployment problmes in 201-2012 Chrysler Jeep (NHTSA Campaign ID Number : 13V233); cracks or leaks in the fuel delivery module of 2013 Ford Lincoln (NHTSA Campaign ID Number : 13V227); and potential for melt in the CNG solenoid, with risk of fire in 2011-2013 Chevy GMC (NHTSA Campaign ID Number : 13V225).
Despite Marchionne's confidence in the Chrysler brand, locking heads with NHTSA can be risky. Right now, NHTSA has made a request for voluntary recall. However, if further agency investigation reveals that Chrysler is hiding evidence of safety defects, that could lead to an much more expensive mandatory recall, along with stiff civil penalties. Undoubtedly, Chrysler has done a cost-benefit analysis of this business decision. Just where the value of human life or injury fits into that calculus is entirely unclear.