Fiat Chrysler CEO's Testimony Starts in Jeep Lawsuit--Update

By Mike Spector And Christina Rogers 

A jury began hearing Fiat Chrysler Automobiles NV Chief Executive Sergio Marchionne's testimony Tuesday in a lawsuit over the death of a 4-year-old boy in a Jeep that caught fire, a case expected to draw new attention to the fuel tanks in older sport-utility vehicles that federal regulators have tied to 51 deaths.

Lawyers for the boy's family, which alleges Chrysler was responsible for his wrongful death, started to play a videotaped deposition of Mr. Marchionne Tuesday afternoon. Chrysler, the Jeep's manufacturer, is now called FCA US LLC.

The trial, which began earlier in the day in a Georgia courtroom, comes in the wake of a record number of vehicle recalls in the U.S. last year and public investigations into defective ignition switches in General Motors Co. vehicles and rupture-prone air bags made by Takata Corp. of Japan.

Jurors viewed a brief part of Mr. Marchionne's testimony dealing with a vehicle-safety standard during a lawyer's opening statement, according to a video feed of the proceedings provided by Courtroom View Network.

The company says the SUVs in question are safe and that it agreed to recall 1.56 million if them, starting in 2013, and inspect other Jeeps to assuage customer concerns, and not as an admission of wrongdoing.

The company currently is installing trailer hitches on the backs of the Jeeps designed to give them more protection in lower-speed collisions.

Fiat Chrysler has avoided the kind of recall scrutiny received by GM and Takata.

Both companies have spent heavily on dealing with their safety problems, and have faced U.S. Justice Department inquiries, fines from regulators and hearings on Capitol Hill.

Federal regulators have raised concerns about the pace of the Jeep trailer-hitch installations, but have stopped short of asking Chrysler to designate the vehicles as defective.

Mr. Marchionne's testimony is expected to spotlight Chrysler's tussles with regulators over millions of older Jeep models whose fuel tanks were installed behind the rear axle. The government, when originally requesting a recall, concluded that the tanks are vulnerable to igniting in rear-end crashes.

The auto maker initially resisted a June 2013 request by the National Highway Traffic Safety Administration to recall 2.7 million Jeep Grand Cherokee and Liberty SUVs from model years 1993 to 2007.

It took a meeting between Mr. Marchionne and two top auto-safety regulators for the auto maker to begin dealing with the Jeeps.

The parents of the 4-year-old boy, Remi Walden, sued Chrysler after their 1999 Grand Cherokee burst into flames in a rear-end collision while stopped and waiting for traffic to clear in March 2012, according to court records.

The vehicle was among the Jeeps the auto maker agreed to inspect as part of a "customer satisfaction campaign," in lieu of a recall.

A Fiat Chrysler spokesman said the Jeep was rear-ended by a pickup truck in a "violent, high-energy crash caused by a negligent driver."

After a Chrysler official contacted then-NHTSA head David Strickland in early June 2013, a meeting was set between Messrs. Marchionne and Strickland and then-U.S. Transportation Secretary Ray LaHood, according to emails reviewed by The Wall Street Journal.

"The meeting would only be with the Secretary and I, no other staff, as Sergio wanted," Mr. Strickland wrote in an email to Chrysler's Jody Trapasso on June 7, 2013.

A Fiat Chrysler spokesman said Mr. Marchionne only communicated that he would attend the meeting alone.

After the meeting, both sides eventually agreed to the limited recall, service campaign and trailer-hitch solution. A NHTSA spokesman said the agency continues to receive complaints from consumers having trouble getting their Jeeps repaired.

A Fiat Chrysler spokesman said the company has engaged in more than five million additional mailings, emails, phone calls and Facebook Inc. ads to alert Jeep owners, and had received about 61,000 responses as of the end of last week.

Regulators agreed to the deal in part because they weren't certain they would prevail if they ordered a recall and Chrysler decided to challenge it in court. The government would have had to prove that its evidence of a safety defect outweighed the auto maker's contrary evidence, said a person close to the matter.

The government's analysis showed the Jeeps performed worse than other similar vehicles in low and moderate-speed collisions, this person said. The problem could have remained unaddressed if regulators had continued fighting the company, this person said.

Write to Mike Spector at [e-mail] and Christina Rogers at [e-mail]

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