Chrysler Group is recalling almost 600,000 vehicles in the U.S. for problems ranging from failing brakes to sticky accelerators to electrical fires, federal safety regulators disclosed Monday. The actions, which involve some of Chrysler's most iconic vehicles, including its popular minivans, threaten to undermine the automaker's momentum as it struggles to overcome the stigma of a government bailout and its descent into bankruptcy last year.
Chrysler told the National Highway Traffic Safety Administration last week that nearly 285,000 Chrysler Town & Country and Dodge Grand Caravan minivans from the 2008 and 2009 model years could develop a problem in the electrical system that could cause a short circuit in the latch for the sliding door, possibly causing a fire.
Further, Chrysler said it would recall as many as 288,968 Jeep Wrangler sport utility vehicles from model years 2007 through 2010 that could experience brake failures caused by leaking brake fluid.
These recalls are in addition to one reported Friday involving as many as 25,336 Dodge Caliber and Jeep Compass vehicles for potentially sticky accelerators. The manufacturer of the gas-pedal assembly, CTS (CTS), is the same company that supplied accelerator pedals for certain Toyota Motor (TM) models that have been recalled for similar problems.
Owners of the affected models are to be notified by Chrysler later this month. Chrysler said the vehicles will be repaired without charge.
The recalls aren't the end of the world for Chrysler, but they certainly won't help with marketing or vehicle-resale value, says Art Wheaton, an auto industry analyst at Cornell University. The biggest recall involves Chrysler's "bread-and-butter" minivans, which have long been profitable for the Auburn Hills, Mich., automaker. "There's really not much else Chrysler or Dodge has that [is] worthwhile," he says.
Still, Wheaton says, there is hope that Fiat's recent takeover of Chrysler will ultimately result in a turnaround for the smallest of Detroit's Big Three automakers. Last month the company reported sales rose 33% in May, delivering nearly 105,000 vehicles and marking the first time Chrysler sold more than 100,000 vehicles in a single month since March 2009.
Small Cap Investing
Learn now to invest in small companies the right way.View Course »