DETROIT, JULY 1 -- Chrysler Corp. Chairman Lee Iacocca, conceding some customers were not treated "fair and square," today said the auto maker will offer extended warranties and free repairs to owners of cars that were driven by company executives and later sold as new.
A federal grand jury in St. Louis last week indicted Chrysler and two of its top executives for disconnecting odometers during vehicle evaluations and selling those cars as new. The indictment also charged that several cars may have been damaged during testing, repaired and then sold as new to unknowing customers.
"The only law we broke was the law of common sense," Iacocca said at a news conference at the company's Highland Park headquarters.
Iacocca said the company is tracing vehicles that may have had their odometers disconnected and will offer current owners of those vehicles extended warranties. He also said that owners can bring in cars for free inspections and product deficiencies will be fixed without charge.
"The only thing we're really recalling here is our integrity," Iacocca said.
For cars that were allegedly damaged during testing procedures, Iacocca said Chrysler would offer owners new cars of comparable value.
Iacocca said the program to keep customers satisified is in not an admission of guilt to last week's allegations.
Iacocca said the customer satisfaction program will cost "less than $180 million" and that owners should be notified next week. Chrysler also will take out full-page ads in several newspapers and weekly magazines that say: "Testing a car is a good idea. Disconnecting odometers is a lousy idea" with Iacocca's signature at the bottom.
Chrysler expects to be able to trace records of cars affected by the program back between two and three years, Iacocca said.
"We now know some abuses took place and that we were not treating our customers fair and square." he said.
Iacocca called the practice of disconnecting odometers "dumb," and said the practice of selling damaged vehiles was "stupid."