Chrysler expected to formally refuse government's request to recall older Jeeps for fire risk

DETROIT — In one of the biggest-ever showdowns between an automaker and the government, Chrysler on Tuesday is expected to file papers explaining its refusal to recall 2.7 million older Jeep SUVs that are at risk of catching fire in rear-end collisions.

The government says 51 people have suffered fiery deaths in Jeep Grand Cherokees and Libertys that were hit from behind. Regulators claim that the position of the gas tank, behind the rear axle, makes the Jeeps more susceptible to a fiery crash than similar models.

Chrysler is expected to stick to its contention that the SUVs are as safe as other vehicles on the road from that era. The Jeeps, it says, met all federal safety standards when they were built, some more than two decades ago. Regulators are unfairly holding the vehicles to a new standard for fuel tank strength, Chrysler claims.

Chrysler has successfully used that argument in the past to resist a recall. But that stance carries some substantial financial and public-relations risks.

Car companies rarely spar publicly with the National Highway Traffic Safety Administration, the agency that monitors auto safety. Both sides in the Jeep case say they prefer negotiations, but neither is backing down. Once Chrysler formally rejects the recall, the next step would be for NHTSA to find that the Jeeps are defective and schedule a hearing. Ultimately, though, NHTSA would need a federal court order to impose the recall.

In the meantime, owners of the Jeeps are left in limbo and have to decide themselves if the SUVs are safe enough to transport their families.

The last time an automaker defied a NHTSA recall request was early in 2011, when Ford said that calling back 1.2 million pickup trucks for defective air bags wasn't justified. Ford later agreed to the recall after NHTSA threatened to hold a rare public hearing on the issue.

Earlier this month, the agency sent a letter to Chrysler asking it to voluntarily recall Grand Cherokees from 1993 through 2004 and Libertys from 2002 through 2007. The plastic gas tanks, the government said, can rupture when hit from behind, spilling fuel and causing deadly fires.

Chrysler responded publicly, saying in a statement that it "does not intend to recall the vehicles." The car company's formal response is due Tuesday.

Chrysler Group LLC, which is majority-owned by Italy's Fiat SpA, said the Jeeps are among the safest vehicles of their era.

Chrysler did move the gas tank on the Grand Cherokee in front of the rear axle in 2005, and did the same thing with the Liberty in 2007.

Strengthening the structure around the gas tanks of the older Jeeps, likely the lowest-cost option, would be costly. Relocating them ahead of the axle would cost even more.

Even that solution would cost Chrysler $270 million, assuming all eligible car owners get the shield, about one-sixth of the company's profit last year.

David Kelly, former acting NHTSA administrator under President George W. Bush, says he expects the matter to be settled before a public hearing takes place.

"Chrysler doesn't want to have a hearing with a bunch of people who have been in crashes and have lost family members," he says.

Kelly expects a lot of posturing before any settlement is reached. Such a settlement could include limiting which vehicles are recalled, he said. "There's a lot of different alternatives," says Kelly.

Chrysler says its review of nearly 30 years of data shows a low number of rear-impact crashes involving fire or a fuel leak in the affected Jeeps. "The rate is similar to comparable vehicles produced and sold during the time in question," the company said in its statement on June 4. It also said NHTSA left some similar vehicles out of its investigation.

The agency said the older Jeeps performed poorly when compared with all but one similar vehicle from the 1993 to 2007 model years, "particularly in terms of fatalities, fires without fatalities, and fuel leaks in rear-end impacts and crashes."

Among the 51 deaths in the SUVs is Remington "Remi" Walden, a 4-year-old boy from Bainbridge, Ga. Walden was killed when his aunt's 1999 Grand Cherokee was hit from behind by a pickup truck on March 6, 2012. The child was on his way to a tennis lesson when the aunt, Emily Newsome, signaled and stopped to make a left turn, according to lawsuit filed against Chrysler by the boy's parents.

The driver of the pickup, Bryan Harrell, who also is a defendant, was following the Jeep too closely and failed to keep proper lookout, the lawsuit alleges. His 1997 Dodge Dakota rear-ended the Jeep, causing the fuel tank to rupture and spill gasoline, which ignited, according to the lawsuit. Remi, seated behind the driver in a booster seat, was engulfed in flames and later died.

"Numerous witnesses saw Remi struggling to escape and heard him screaming for help," the lawsuit says.

The lawsuit alleges that Chrysler placed the gas tank in a "crush zone" behind the rear axle and knew the location was dangerous, and that the company failed to protect the gas tank against rupturing.

A lawyer for the Walden family says Chrysler is liable only for actual damage such as pain and suffering, not punitive damages. Still the family has the ability to get verdicts in the millions of dollars, the lawyer said.

Chrysler has fended off a recall request in the past, using the unfair standards argument. Chrysler refused a NHTSA request in 1996 to recall 91,000 Dodge Stratus and Chrysler Cirrus cars for an alleged seat belt defect. NHTSA sued the company and won in federal court. But in 1998, an appeals court reversed the decision, saying NHTSA had unfairly held Chrysler to a new standard.