Marchionne Stands Confident in Chrysler Recall Rejection


Bloomberg News

Chrysler Group LLC makes an unusual decision to buck what would be one of the largest U.S. auto recalls, rejecting the NHTSA’s recall of 2.7 million Jeeps.

Find out what CEO Sergio Marchionne and analysts have to say.

Chrysler Group LLC’s unusual decision to buck what would be one of the largest U.S. auto recalls shows how much the company has at risk in reputation, perhaps more than money.

The U.S. National Highway Traffic Safety Administration, in asking Chrysler yesterday to recall 2.7 million Jeep Grand Cherokee and Liberty sport-utility vehicles made over 15 model years, linked them to 51 deaths in fires after rear-end collisions.

Sergio Marchionne, chairman and chief executive officer of Chrysler and its majority owner, Italy’s Fiat SpA, said the Auburn Hills, Michigan-based automaker “stands behind the quality of its vehicles.” Chrysler in a report called the SUVs “among the safest vehicles of their era.”

Michelle Krebs, a senior analyst for auto-researcher, called the reaction “highly unusual,” particularly after Toyota Motor Corp. underwent multiple investigations and hearings after resisting recalls over unintended acceleration.

“It’s unusual for a company to push back so strongly against a regulator, particularly when it comes to safety and their brands,” Mike Rozembajgier, vice president of ExpertRecall, an Indianapolis-based company that works with companies to manage product recalls.

NHTSA hopes that Chrysler will reconsider its position and take action to protect its customers and the driving public,” Administrator David Strickland said in an e-mailed statement.

Chrysler said in its statement that all the vehicles under scrutiny meet or exceed federal safety standards, including those relating to fuel-system integrity. The company cooperated with NHTSA’s review, providing technical information and analyses, it said.

EDITOR’S NOTE: Dealer Digest Daily will do a complete review of the Chrysler Jeep recall and rejection in the Smart Thinking section on June 4 and 6.