Chrysler Agrees to Recall of 2.7 Million Jeep Vehicles

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The 2002 Jeep Liberty Limited

After a public disagreement that threatened to blow up into a larger battle, Chrysler said Tuesday that it agreed to recall 2.7 million Jeep vehicles that a government safety watchdog said could potentially erupt into fire if rear-ended.

Chrysler had been expected to file papers Tuesday refusing to comply with a National Highway Traffic Safety Administration's voluntary recall request sent earlier this month. That request covered Jeep Grand Cherokees in model years 1993 to 2004 and Libertys in model years 2002 to 2007.

NHTSA had warned after investigations that a crash from behind on these vehicles could puncture the fuel tank, located in the rear of the models, spill fuel and potentially cause a fire. NHTSA said the defect may have been responsible for up to 51 deaths.

Chrysler had disagreed with NHTSA's assessment.

"As a result of the agreement, Chrysler Group will conduct a voluntary campaign with respect to the vehicles in question that, in addition to a visual inspection of the vehicle will, if necessary, provide an upgrade to the rear structure of the vehicle to better manage crash forces in low-speed impacts," Chrysler said in a statement.

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NHTSA set events in motion earlier this month when it sent a letter to Chrysler recommending a safety recall of certain older Jeep Grand Cherokee and Jeep Liberty models with gas tanks mounted behind their rear axles. The letter stated that, in an initial assessment, the vehicles have performance and design defects that could cause deadly fires in rear-end collisions.

Chrysler's response in a "White Paper on NHTSA's Recall Request" said the company has fully cooperated with the government's review of the model years in question. The paper states that it provided "technical information and detailed analyses showing these models are safe, and meet or exceed all applicable federal motor vehicle safety standards."

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The paper also said Chrysler disagreed with NHTSA's recall request. "The subject vehicles are not defective and their fuel systems do not pose an unreasonable risk to motor vehicle safety in rear-impact collisions," said Chrysler, which is owned by Italian automaker Fiat.

Chrysler stuck to that line Tuesday, saying in a brief statement that the vehicles are not defective and are "among the safest in the peer group."

"Nonetheless, Chrysler Group recognizes that this matter has raised concerns for its customers and wants to take further steps, in coordination with NHTSA, to provide additional measures to supplement the safety of its vehicles," the statement said.

As recently as early Tuesday, Chrysler officials were signaling that they would reject the recall request even if that meant squaring up against NHTSA in court. But a senior Chrysler source who asked not to be named acknowledged that the automaker came to recognize it might be able to win that battle yet still could lose in the court of public opinion.

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"The morning [news reports] were accurate but the decision wasn't finalized," said the Chrysler veteran, who was not officially authorized to discuss the recall, adding that the automaker "absolutely" recognized that public sentiment seemed to be shifting against the company. "Even if all the data shows we're right … we're impacted by concerns about public opinion. This is an iconic brand and we have to consider this from a reputation standpoint."

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Had the company decided to rebuff NHTSA it could have limited the scope by citing the 10-year statute of limitations on recalls, noted Clarence Ditlow, director of the Center for Auto Safety, the consumer group that originally spurred NHTSA to investigate the Jeep gas tank issue three years ago. Such a move would effectively have reduced the number of vehicles the government could have continued pressing to recall.

NHTSA could have responded by ordering a series of public hearings. Ultimately, the case could have wound up in court.

—By staff reports, NBC News. The Detroit Bureau's Paul A. Eisenstein contributed reporting. Follow him on Twitter @DetroitBureau.