---

Chrysler Responds to Civil Penalties

18 August 1998

Chrysler Statement In Response to District Judge Order Assessing Civil Penalties

    AUBURN HILLS, Mich., Aug. 17 -- The following statement was
issued today by Susan Cischke, Executive Director of Vehicle Safety for
Chrysler Corporation :

    "Chrysler Corporation is shocked and disappointed by District Judge Emmet
Sullivan's order on Friday assessing $800,000 in civil penalties based on
Chrysler's decision to challenge the government's request to recall and notify
customers of 1995 Dodge Stratus and Chrysler Cirrus vehicles following the
failure of a rear seat belt anchor test.
    "There are really two separate issues, a compliance issue, and a legal
recourse issue.
    "Judge Sullivan previously agreed that NHTSA did not provide the
automotive industry with adequate notice of the agency's interpretation of the
standard, yet he ordered Chrysler to recall the vehicles nonetheless.  The
Company agreed to do so, and in March 1998, recalled the vehicles in question
and notified owners in response to the court order.  We stress, once again,
that there has not been a single incident of rear seat belt anchor failure on
these vehicles.
    "The second, more disturbing, issue deals with recourse.  As a
manufacturer, our only course of action if we disagree with NHTSA, a
government agency, is through the court system.  In this case, we believe that
we had legitimate reasons to disagree with the initial NHTSA determination.
We have followed the appropriate legal procedures step by step and have
complied fully with the court's order.
    "Now, we are essentially being penalized for using the only avenue
available to us -- legal recourse -- and our confidence in getting relief from
unreasonable regulatory actions has been shaken.
    "We plan to appeal this decision."