Chrysler gives in, will recall 2.7 million vehicles

DETROIT — In a course reversal, Chrysler Group LLC said Tuesday it will recall 2.7 million Jeep Grand Cherokee and Jeep Liberty SUVs as requested by the National Highway Traffic Safety Administration.

NHTSA said earlier this month that those vehicles are defective because rear-mounted fuel tanks performed poorly in rear-end collisions. But at the time, Chrysler described the vehicles as "safe" and refused to issue a recall.

The Auburn Hills, Mich., automaker said Tuesday that it had "resolved its differences" with NHTSA and will reinforce the rear-mounted fuel tank in the Jeep SUVs. The recall affects the Jeep Grand Cherokee model years 1993-2004 and the Jeep Liberty model years 2002-07.

NHTSA said the investigation will continue. "Consumers impacted by the safety recall and customer satisfaction campaign should have their vehicles serviced promptly once they receive notification from Chrysler," the agency said.

Even though Chrysler agreed to the recall, the company still argues that its Jeep SUVs are safe.

"Chrysler Group's analysis of the data confirms that these vehicles are not defective and are among the safest in the peer group," the company said in its statement. "Nonetheless, Chrysler Group recognizes that this matter has raised concerns for its customers and wants to take further steps, in coordination with NHTSA, to provide additional measures to supplement the safety of its vehicles."

Chrysler's decision to reverse its earlier position will prevent Jeep's brand image and the resale of its vehicles from damage from negative publicity, said Alec Gutierrez, senior analyst at Kelley Blue Book.

"There was risk of the values of these vehicles declining but with the voluntary recall by Chrysler, that is no longer there" Gutierrez said in an email. "This outcome will not only help consumers, but also Chrysler, as there was also danger that sales could decline if they had refused the recall."

Still unknown is exactly what compromise Chrysler reached with NHTSA or how much the recall will cost the company.

"We don't know what precisely Chrysler and NHTSA have agreed to," senior analyst Michelle Krebs said in an email. "Chrysler obviously calculated the risks and benefits and concluded that the cost to repair these vehicles isn't as expensive as the potential long-term damage that could come from bad public relations. This was probably the right decision by Chrysler."


)2013 Detroit Free Press

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