Though it denies any violation of the law, the Chrysler Corporation says it will no longer disconnect the odometers on cars it says are being test driven immediately after assembly. Chrysler representatives say their policy is similar to the practices followed by their competitors, but other major United States carmakers report they have longstanding policies that prohibit disconnecting odometers.
On Wednesday, the government brought a 16-count indictment against Chrysler and two high-level executives, charging that for 38 years, new cars and trucks built at Chrysler factories across the US were turned over to executives for up to six weeks of personal use.
After the vehicles were driven with their odometers disconnected, the government claims, the gauges were then connected and the cars shipped to unwary customers. The indictment - handed down by a federal grand jury in St. Louis - also claims cars were involved in accidents while in the hands of Chrysler executives, repaired, and then delivered to buyers who were not informed of them.
The government says at least 60,000 vehicles were involved in the alleged fraud between July 1985 and December 1986, and indicated the number could be in the millions since the practice began in 1949.
``That's not correct,'' said Chrysler vice-president Baron Bates, when asked if new vehicles were turned over to company executives for extensive personal use with their odometers disconnected. In a statement, Chrysler officials termed the indictments an ``outrage,'' and while they admitted a practice of disconnecting odometers on randomly chosen vehicles as part of a ``legitimate quality assurance program,'' Mr. Bates insisted it was being done as ``a service to the customer.''
He said vehicles are randomly chosen each day to try to isolate potential quality or safety defects, then turned over to ``qualified and authorized factory representatives,'' who may drive the cars or trucks home overnight but who usually clock an average 40 miles, and almost never more than 65 miles, before returning the cars.
Since the government began its investigation of the Chrysler practice last October, the automaker has ceased disconnecting odometers on test cars, limited the drives to 65 miles, and placed notices in glove boxes advising customers when their cars were tested.
According to the 46-page indictment, one of the test cars involved in an accident under the Chrysler program was a 1984 Dodge Ramcharger that was subsequently sold to a buyer who later complained that shortly after taking delivery of the vehicle, the rear bumper had fallen off. The car had been in a rear-end collision and, the government claims, the repaired bumper was badly secured.
The Chrysler statement acknowledged that ``fewer than 40 [cars] in 10 years'' had been involved in accidents, but indicated they were fully repaired before being shipped to customers.
There are some questions about just how widespread the practice of disconnecting odometers at the factory may be.
A spokesman for the Motor Vehicle Manufacturers Association in Detroit said that such practices run counter to the trade group's policies. General Motors Corporation spokesman John Mueller said, ``GM has had a longstanding policy against disconnecting odometers after the vehicle leaves the assembly line.''
At the Ford Motor Company a spokesman says that Ford does not disconnect or roll back odometers. Every vehicle that's involved in a quality test drive program is clearly labeled as such with a sticker on the windshield ... with the precise number of miles stated.'' Ford sets a maximum of 75 miles on either test program.
Chrysler itself faces the possibility of up to $120 million in fines if convicted on all the counts. The government allegations could also result in a flood of legal action by those who have purchased cars and trucks used in the company's test program.