Chrysler's decision to defy the federal government on a recall request this month, while not without risks, may set a precedent for other companies that want to maintain the safety reputations of their products.
The automaker first stood its ground against a National Highway Traffic Safety Administration recall request, then changed course and agreed to voluntarily recall many SUVs specified by the federal government, but excluding more than a million others. Chrysler also continued to very publicly maintain the safety of its vehicles throughout the process and released data to support its points, including a white paper.
Communications experts say that although the automaker's strategy was rare and somewhat risky in the social media age, it could set a precedent for how other car companies handle recall requests they disagree with – as long as there's no negative impact on bottom lines or reputations.
“People are going to look at this very closely,” says Rich Tauberman, EVP at MWW and a veteran of non-automotive recalls. “I'm sure every other auto manufacturer is analyzing the media and social media response and sales numbers to see from a reputation perspective and in terms of selling cars if it made a blip.”
Earlier this month, the National Highway Traffic Safety Administration requested that Chrysler recall 2.7 million Jeeps, saying there was a defect in 2002 to 2007 Jeep Liberty models and 1993 to 2004 Grand Cherokee SUVs that were at risk of catching fire when hit from behind. The federal agency said the defect was a factor in 37 fatal crashes, resulting in 51 deaths.
Chrysler initially rejected the NHTSA's assessment, saying in a statement at the time that it did not intend to recall the Jeeps cited in the investigation.
Yet shortly before a Tuesday deadline to change its mind, Chrysler reversed course. The automaker compromised with the federal agency on an agreement that essentially excluded more than 1 million Jeeps from the recall. More than 1.5 million vehicles remain subject to a voluntary safety recall. Other SUV models from between 1999 and 2004 are cited in a “customer satisfaction action,” meaning modifications to the vehicles are less likely.
Chris Tennyson, SVP and senior partner at FleishmanHillard, explains that recall communications are “part art and part science,” noting, “I don't think it's wrong [for Chrysler] to say what they feel is the truth.”
He adds that while the strategy had its risks – one major automobile problem recorded on a smartphone can swiftly go viral – Chrysler's decision will give credibility to relatively new parent company Fiat. It also means Chrysler has a new sales opportunity every time a customer visits a dealership with his or her vehicle.
After agreeing to recall many of the SUVs, Tennyson says Chrysler must reach out to customers clearly and proactively about the process.
“They should not go meekly into the recall; they should be very clear. They have to think of this not as a penalty that they dread but as a marketing opportunity and an opportunity to reach the customer in a very proactive way and make sure you put their safety first,” he says. “I always think of recalls as one of the easiest crises a communicator could have. You go to the customer and get them the info they need to bring back or fix the product. But you can't do it halfway; you can't do it mealy mouth.”
Despite the compromise, Chrysler continues to deny the NHTSA's contention that the Jeeps are unsafe, noting in a letter to the federal agency that most crashes detailed in its report took place at high speeds. The company also avoided a costly legal battle with the NHTSA that would have kept the alleged safety defects in the news for months and could have affected sales.
Communicators note that the situation has not yet negatively impacted Chrysler's bottom line. If that trend continues, other automakers could emulate its strategy in similar situations if their internal engineering data maintains vehicles are safe.
“I think Chrysler saved a lot of money. By standing firm and having the recall modified the way they did, it limits their liability in any litigation and reduces the costs they would have to put forward for repairs,” says Ed Cafasso, SVP at Solomon McCown & Company. “It'll be interesting to see if some companies pursue this very public rebuttal strategy when there's a close call with the data. It could signal a change in brand-protection strategy.”
However, Jason Mudd, principal of AXIA Public Relations, says Chrysler hurt itself by creating doubt about whether it prioritizes customer safety.
“Ultimately, they were wise to choose voluntary safety action over a long-term battle with the government, where people could have given testimony about lost loved ones,” he says. “But all [many customers] heard were the headlines of Chrysler protesting a recall, so for two weeks in the back of my mind were questions about what are the corporate values of this company.”
Mudd adds that he believes Chrysler should have released more details about its negotiations with the federal government.
“I think they should have been more forthcoming in the public domain about what the offer was, the counter-offer, and where the parties were split,” he says. “The only message I heard was that they were refusing instead of that there was an alternative solution.”
Chrysler declined to comment for this article, referring questions to its statements on the recall request.