Bloomberg News

Chrysler Jeep Fuel-Tank Fire Probe Upgraded by U.S. NHTSA

June 14, 2012

As many as 5.1 million sport-utility vehicles made by Chrysler Group LLC, the carmaker run by Fiat SpA (F), will get closer scrutiny from U.S. regulators looking into about two dozen reports of fires after rear-impact crashes.

The U.S. National Highway Traffic Safety Administration upgraded a preliminary investigation of Jeep Grand Cherokees and added Jeep Cherokee and Jeep Liberty models with fuel tanks behind the rear axle to an engineering analysis, the agency said today in a website posting. Fires related to rear-impact crashes in the Grand Cherokees may have caused at least 15 deaths and 46 injuries, the regulator said.

Such upgrades may lead to recalls. Chrysler doesn’t know how many of the 5.1 million vehicles, some of which were made in the early 1990s, are still operating, said David Dillon, Chrysler senior manager for regulatory affairs. A recall of 5.1 million vehicles would be among the 10 largest in the U.S.

“With the number of vehicles involved and potential severity of the problem, this could set Chrysler back considerably,” Dennis Virag, president of Automotive Consulting Group in Ann Arbor, Michigan, said in a telephone interview today. “The cost to Chrysler could be considerable, and the cost in terms of reputation would be high” should the probe lead to a recall, he said.

Chrysler doesn’t think the investigation will end in a recall, Dillon said.

‘Very Confident’

“We take these matters very, very seriously,” he said in a telephone interview. “While we’re very confident that the data will prove the vehicles are not defective, nor do they present an unreasonable risk to safety, we are open to working with the agency.”

The recalls of Toyota Motor Corp. (7203) models in 2009 and 2010 over reports of unintended acceleration covered 10 million vehicles.

Chrysler declined to estimate the cost of a potential recall for the vehicles being investigated.

“Safety, not cost, is Chrysler Group’s top concern,” Eric Mayne, a company spokesman, said in an e-mail today. “We believe the vehicles are safe and that a detailed engineering analysis will bear that out.”

‘Modern-Day Pinto’

The Center for Auto Safety, a consumer advocacy group based in Washington, has urged Chrysler to better protect the vehicles’ fuel systems. In a Sept. 1, 2011, letter to Chrysler Chief Executive Officer Sergio Marchionne, the group’s head, Clarence Ditlow, called the vehicles “a modern-day Pinto for soccer moms.”

About 1.5 million Ford Motor Co. (F:US) Pintos were recalled in the late 1970s because of concerns that rear-end collisions could spill gasoline and ignite fires.

NHTSA opened its probe into the Chrysler vehicles in October 2010.

Chrysler analyzed agency crash data in Grand Cherokees under investigation, along with comparable vehicles made by other manufacturers, and found no greater incidence of fire following rear-impact crashes in its vehicles, Dillon said. The company has received reports of 23 rear-impact crashes involving fires and knows of two more reported to NHTSA, he said.

The regulator said it found the opposite, that Jeep Grand Cherokees were more likely to have fuel tanks breached with subsequent fires in rear-end crashes than were General Motors Co. (GM:US)’s Chevrolet Blazer, Ford’s Explorer or Toyota’s 4Runner.

“The National Highway Traffic Safety Administration does not comment on open safety defect investigations,” Lynda Tran, a spokeswoman for the agency, said in an e-mail. “The agency will share the findings of the investigation upon completion of its analysis.”

NHTSA’s investigation includes model year 1993 to 2004 Grand Cherokees, model year 1993 to 2001 Cherokees, and 2002 to 2007 Liberty models. In 2005, Chrysler redesigned the vehicles, increasing the space between the front and rear axles and placing the fuel tanks there.

To contact the reporter on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net


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