The National Highway Traffic Safety Administration sent Chrysler a letter asking that the company voluntarily recall Jeep Grand Cherokees from 1993 through 2004 and Jeep Libertys from 2002 through 2007.
Chrysler Group LLC, which is majority-owned by Italy's Fiat SpA, said in a statement Tuesday that the Jeeps are safe and it "does not intend to recall the vehicles."
Such a refusal by an auto company is rare. NHTSA can order a recall but may need a court order to enforce it.
NHTSA opened an investigation into the Jeeps in August 2010 at the request of the Center for Auto Safety, a Washington, D.C., advocacy group. Clarence Ditlow, the center's director, has repeatedly sent letters to Chrysler seeking a recall.
The agency found that the Jeeps' fuel tanks can fail when hit from the rear, leak fuel and cause fires if there's an ignition source. The placement of the tanks behind the rear axle and their height above the road is a design defect, NHTSA wrote in a letter to Chrysler dated Monday.
Chrysler moved the fuel tanks on the Grand Cherokee ahead of the rear axle in 2005, and did the same thing with the Liberty in 2007. But retrofitting the older Jeeps with repositioned tanks would be time consuming and costly. In 2011, when Toyota recalled 1.7 million cars for possible fuel leaks from loose fuel pressure sensors, an analyst estimated the cost at $240 million.
Automakers usually agree to a recall request, partly to avoid bad publicity. In the last three years, Chrysler has conducted 52 recalls.
The company previously refused a NHTSA request in 1996, when the agency asked it to recall 91,000 Dodge Stratus and Chrysler Cirrus cars for an alleged seat belt defect. NHTSA sued the company and won in federal court. But in 1998, an appeals court reversed the decision, saying NHTSA had unfairly held Chrysler to a new standard.
Chrysler was represented in that case by John Roberts, now chief justice of the U.S. Supreme Court.
Chrysler says its review of nearly 30 years of data shows a low number of rear-impact crashes involving fire or a fuel leak in the affected Jeeps.
"The rate is similar to comparable vehicles produced and sold during the time in question," the company said in the statement.
But NHTSA said the older Jeeps performed poorly when compared with all but one similar vehicle from the 1993 to 2007 model years, "particularly in terms of fatalities, fires without fatalities, and fuel leaks in rear-end impacts and crashes."
NHTSA found at least 32 rear-impact crashes and fires in Grand Cherokees that caused 44 deaths. It also found at least five rear crashes in Libertys, causing seven deaths. The agency calculated that the older Grand Cherokees and Libertys have fatal crash rates that are about double those of similar vehicles. It compared the Jeeps with the Chevrolet S10 Blazer, Ford Explorer, Toyota 4Runner, Isuzu Rodeo, Isuzu Trooper, Mitsubishi Montero, Suzuki Sidekick and Suzuki XL-7.
NHTSA asks Chrysler to recall the vehicles and "implement a remedy action that improves their performance in rear-impacts and crashes." It made no recommendation on a fix.
The dispute leaves owners of the affected Libertys and Grand Cherokees waiting for government or court action.
"Unfortunately, consumers with problematic Jeeps are in limbo," Edmunds.com Senior Analyst Michelle Krebs said.
Chrysler says most traffic deaths occur in front, side and rollover crashes. It called the older Grand Cherokees and Libertys "among the safest vehicles of their era," saying they met all federal safety standards in effect at the time they were built.
NHTSA concedes that point, but says the standards are minimums for vehicle safety. "The existence of a minimum standard does not require NHTSA to ignore deadly problems," the letter said.
Chrysler has until June 18 to respond to the letter. If it formally decides against a recall, the company must explain the action to NHTSA, and the agency can then issue a final decision that the Jeeps are defective.
NHTSA has the authority to fine companies if they are slow to provide data or recall vehicles. Automakers have been more compliant of late, after the agency fined Toyota Motor Corp. a record $66 million for failing to quickly report problems and for delaying a recall. Toyota paid the fine without admitting it violated the law.
When NHTSA started the probe in 2010, the agency said it knew of 10 crashes and 13 deaths that were likely associated with rear-end crashes involving Grand Cherokees.
NHTSA wouldn't comment on the length of the Jeep probe, but pointed to its record. It said in a statement that its investigations brought 134 recalls of 9 million vehicles last year alone. Investigations that are more complex with millions of vehicles take more time, it said.