Chrysler’s Crisis Communications Conundrum

Chrysler has refused an order to recall some 2.7 million of its Jeep SUVs, which the government claims are essentially death traps due to the dangerous placement of its gas tanks. In the last two decades, more than 50 people have died in Jeep Grand Cherokees and Liberties when rear-end collisions caused the gas tanks to explode and engulfed the cars in flames.

Can you say Ford Pinto?

The government order follows a two-year investigation by the National Highway Traffic Safety Administration, which concluded the cars’ gas tanks, located behind the rear axle and perilously close the rear bumper, put it at severe risk for explosion in a rear-end collision. And when gas tanks explode, people die in the swift fireballs that generally ensue.

Chrysler claims the cars pose no danger, are well designed, and meet all federal standards. And in so doing has thumbed its nose at NHTSA and refused to comply with the recall order. A showdown is coming, most likely in the form of a government lawsuit. Stay tuned.

But, alliteration aside, here is Chrysler’s crisis communications conundrum: As I write in my latest book, Crisis Communications, “Given the general public’s disdain for any form of government today, you’ve really got to screw up big time to have the government wear the white hat instead of you.”

There are certain agencies that have as their sole mission the safety and protection of the people. NHTSA, which has no ulterior motives, no hidden agendas, is one of them. They investigate claims of design flaws in automobiles and issue public orders to correct any problems they find. Car manufacturers may differ, but NHTSA is perceived as one of the “good guys” in the white hats – just doing their job to protect the people.

And that’s Chrysler’s problem in a nutshell: perception. Because whether or not Chrysler has a leg to stand on, in the pitched battle between perception and reality, perception always wins. If you’re on the opposite side of the table from the good guys, what is the public perception of you?

Chrysler’s not stupid, so why buck the government on this one? There are several possible reasons, which all come down to money. The recall, and the fix, will cost hundreds of millions of dollars. Also, the company is mired in a mountain of litigation from victims’ families, and agreeing to a recall could easily be construed as an admission of liability that can be introduced at trial for increased damages. And there is always the very real erosion of market share.

All of which present even more crisis communications challenges ahead.

The last significant case of rear-end exploding gas tanks was the Ford Pinto back in the 1970s, in a situation that eerily mirrors the Jeep crisis today. Ford resisted the government’s recall order and for many years slugged it out in courts of law and courts of public opinion. Ford lost in all courts, and finally complied with the recall and redesign. But many innocent people died in the meantime.

In research I conducted for an earlier book, Crisis Management: Planning for the Inevitable, I included information that suggested one reason for Ford’s feet-dragging was because the automaker’s bean counters concluded it was cheaper in the long run to settle even more individual wrongful death suits than to recall and redesign the vehicles until they had gotten a proper return on their investment out of the original, faulty design. Is this Chrysler’s strategy, too?

It took many years for Ford to rehabilitate its image after the perception of so blatantly putting profit ahead of public safety. Did they? Was it true? Perception says it was.

Chrysler may want to go to school on Ford’s mistakes, before its too late.

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This piece also ran on CommPro.biz where Steven Fink is a regular contributor.