Listen To The Story

The National Highway Traffic Safety Administration asked Chrysler to recall a total of 2.7 million vehicles: all Jeep Grand Cherokees built between 1993-2004 and Jeep Liberties made between 2002-2007. Regulators say the fuel tanks are faulty and dangerous, but Chrylser, which received a $10.5 billion bailout from the government, insists the vehicles are safe.

These sorts of disputes normally get worked out behind closed doors, but Chrysler disagrees with NHSTA’s interpretation of the accident data. The carmaker insists the Jeeps in questions aren’t any more susceptible to fuel tank fires than any other vehicle on the road. It also points out that the Jeeps met the safety standards of the time they were created.

Still, Chrysler’s decision to refuse a recall request is a high-stakes publicity gamble.

“I don’t think there’s a PR professional anywhere that would counsel them to take this path if they didn’t believe [Chrysler was] absolutely right, and that they were going to ultimately come out of this better than they went in,” says Larry Vellequette of Automotive News.

The recall could cost Chrysler an estimated $300 million, but it’s harder to pin down the cost of defying federal regulators.

Negative publicity has already started. Clarence Ditlow at the Center for Auto Safety, which pushed for a recall, says he was stunned at Chrysler’s stance.

“We were shocked, because we’ve never seen a fire defect where children in child-seats in the back of these Jeeps are literally trapped and burned to death,” Ditlow says.

Federal officials have linked the not-quite-recalled Jeeps to 51 deaths, but Chrysler disputes that number.

Industry consultant Alan Baum says Chrysler may want to consider Audi’s experience in the 1980s. Audi insisted the Audi 5000 was not suddenly accelerating, and blamed the problem on driver error.

"When all was said and done, there wasn’t sudden acceleration,” says Baum. “But the damage to the brand was dramatic.  So you can win the battle and lose the war.”

Chrysler has until June 18th to change its mind.  If not, NHTSA can sue the automaker in court.

“I think the best compliment I can give is not to say how much your programs have taught me (a ton), but how much Marketplace has motivated me to go out and teach myself.” – Michael in Arlington, VA

As a nonprofit news organization, what matters to us is the same thing that matters to you: being a source for trustworthy, independent news that makes people smarter about business and the economy. So if Marketplace has helped you understand the economy better, make more informed financial decisions or just encouraged you to think differently, we’re asking you to give a little something back.

Become a Marketplace Investor today – in whatever amount is right for you – and keep public service journalism strong. We’re grateful for your support.

Follow Sarah Gardner at @RadioGardner