Recall battle that nobody wins
by Jacques Gordon
If you read news about the automotive industry, you’ve already heard that the National Highway and Traffic Safety Administration (NHTSA) has requested that Chrysler Group recall several models of the Jeep Grand Cherokee and the Jeep Liberty over a fuel tank/fire safety issue. Today Chrysler Group responded with a refusal to issue a recall, stating that their vehicles are built according to federal safety standards that were in force at the time these vehicles were built, and they cannot be responsible for meeting standards enacted after the vehicle build date. Seems logical, and a close reading of the White Paper on the Chrysler Group media Website offers strong support for their argument.
The models in question date from 1993 to 2007, and NHTSA says they’re more likely to suffer a fuel tank leak and/or fire after a rear impact because the gas tank is behind the rear axle. The White Paper quotes a statement in NHTSA’s own 2003 report in which they concluded that their crash test “demonstrates that structural and component design is a more critical factor than fuel tank location in maintaining fuel system integrity.” However, Chrysler Group notes the fuel system design standards were revised in 2008, and they say “NHTSA seems to be holding Chrysler Group to a new standard for fuel tank integrity that does not exist now and did not exist when the Jeep vehicles were manufactured.”
The very existence of this situation has far-reaching affects, and we can see some of the problems it causes by looking at what happened to the light aircraft industry.
Litigation resulting from an airplane crash almost always includes questions about product liability. Before 1994, aircraft manufacturers were often called to defend the design of aircraft or components that were built to strict government certifications more than thirty years earlier. Over time, product liability insurance rose so sharply that eventually it represented half the cost of new single-engine airplanes. When insurance providers began to stop offering product liability insurance, manufacturers had no choice but to simply abandon the market. Tens of thousands of jobs were lost, and the private pilot community was left with an aging fleet of used aircraft that were increasingly expensive to buy and maintain and didn’t have the latest safety features. The situation was finally remedied by the General Aviation Revitalization Act of 1994, which limited manufacturer’s product liability to 18 years. Happy days are here again for the general aviation community.
Not so for car buyers. If, as they claim, Chrysler Group is being held liable for not meeting federal standards created after the vehicle build date, automakers around the world will have no choice but to become Chrysler’s allies in this battle. If their lawyers win, the government’s credibility will be compromised, and so will their ability to demand product recalls. If on the other hand the government’s lawyers prevail and Chrysler Group is forced to recall 2.7 million vehicles, it will be a tough blow to an already financially fragile company and create a nightmare precedent for the automotive industry. Either way, the car-buying customer loses. Let’s hope there’s a third possibility.
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