Group Alleges Chrysler ‘Lemon Laundering’

Chrysler has spent $1.3 billion since 1993 buying back vehicles with chronic defects, then reselling the bulk of these “lemons” to consumers, a safety group said Chrysler documents show. The auto maker, now owned by Germany’s DaimlerChrysler, said the documents unsealed last week in North Carolina show no wrongdoing and are being mischaracterized by consumer groups and product-liability attorneys. The papers show “the extensive corporate-level involvement in a process that historically had been dismissed as the misbehavior of a few rogue dealers,” said Ralph Hoar, head of Safety Forum, an advocacy group that posted some of the documents on its Web site. Chrysler said dealers are always told which vehicles have been bought back from customers, and must relay such information to consumers. Consumer advocates say “lemon laundering” is widespread and want the Federal Trade Commission to require auto makers to tell consumers about their duds. A few years ago, the FTC held hearings on lemons at the request of the consumer groups, but no action has been taken.