Tag Archive | "Chrysler"

Chrysler Board Adds 6 New Directors

Chrysler Group LLC said Friday it nearly doubled the size of its board, adding some key company executives and the former chief financial officer of Philip Morris International, reported The Detroit News.

The Auburn Hills unit of Fiat Chrysler Automobiles NV said it named former tobacco company CFO Hermann G. Waldemer as one of six new directors who started Monday. One director, Douglas Steenland, a former Northwest Airlines chief executive, is stepping down after five years on the board. The board now has 13 members.

The other new board members are:

  • Reid A. Bigland, head of U.S. sales, Chrysler Group; chairman, president and chief executive officer, Chrysler Canada Inc.; president and chief executive officer, Ram Truck brand; member of Fiat SpA Group Executive Council.
  • Giorgio Fossati, general counsel, Fiat SpA
  • Michael J. Keegan, senior vice president, human resources, and corporate sustainability officer, Chrysler Group LLC; member of Fiat SpA Group Executive Council.
  • Michael Manley, president and chief executive officer, Jeep brand; chief operating officer for Asia Pacific and lead executive for International Operations, Chrysler Group; member of Fiat SpA Group Executive Council.
  • Richard K. Palmer, chief financial officer, Chrysler Group; chief financial officer, Fiat SpA; member of Fiat SpA Group Executive Council.
  • “I welcome this group of strong leaders to the board,” said Chrysler CEO Sergio Marchionne. “Their collective experiences will help propel us forward as we begin to execute our five-year plan.”

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Chrysler Recalls 10,700 SUVs for Cruise Control Defect

Chrysler Group LLC said it was recalling about 10,700 sport utility vehicles to fix a defect that leads to unintended acceleration in cruise-control mode, reported Reuters.

The vehicles being recalled are certain 2014 Dodge Durangos and Jeep Cherokees, Grand Cherokees and high-performance Grand Cherokee SRTs assembled between Jan. 16 and April 17.

More than half of the recalled vehicles are with dealers or in transit to dealers, Chrysler, a unit of Fiat Chrysler Automobiles, said on its website on Thursday.

About 6,100 vehicles are in the United States, 950 in Canada, 425 in Mexico and 3,200 outside the North American Free Trade Agreement (NAFTA) region, the company said.

The company said it was unaware of any injuries, accidents or complaints related to the issue.

Chrysler said it was found that when cruise control is engaged, the vehicle may accelerate for about a second after the accelerator pedal is released.

“In high-performance vehicles subject to the recall, the event may last up to two seconds before deceleration begins,” the company said.

Chrysler in April recalled nearly 870,000 vehicles to fix a defect in the brake systems.

The company is under investigation by the National Highway Traffic Safety Administration over a recall of 744,822 SUVs the United States in 2012.

The safety regulators are probing the recall after six consumers complained of inadvertent airbag deployments even after fixes were made.

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Nissan, Chrysler Lead in Beating Estimates for May Sales

General Motors Co. (GM), Ford Motor Co., Chrysler Group LLC and Nissan Motor Co. all reported U.S. sales that exceeded analysts’ estimates in May. GM and Chrysler said industrywide sales were stronger than projected, reported Bloomberg.

GM’s deliveries, helped by Chevrolet Cruze sedans and Silverado pickups, rose 13 percent to 284,694, the Detroit-based automaker said today in an e-mailed statement. That beats a 6.4 percent increase projected by the average of analyst estimates.

“The momentum we generated in April carried into May, with all four brands performing well in a growing economy,” Kurt McNeil, GM’s U.S. vice president of sales operations, said in the statement. The month marked GM’s best May in seven years and best since August 2008, the company said. Gains by GM suggest consumers are separating new models on the lot from the older small cars that make up the company’s 2.59 million recalled vehicles linked to at least 13 deaths.

GM with its new pickups, Ford with sport-utility vehicles and Chrysler with its Jeep brand were able to take advantage of a rising market buoyed by improved housing starts. The pace of U.S. home construction jumped in April to its highest level since November. Housing starts climbed 13.2 percent to a 1.07 million annualized rate following March’s 947,000 pace, the Commerce Department reported on May 16. Permits for future projects increased, a sign activity might accelerate in coming months.

Ford, Nissan

Ford’s light-duty vehicle sales rose 3 percent to 253,346 last month, the Dearborn, Michigan-based company said in an e-mailed statement. The automaker’s sales were projected to decline 0.2 percent according to the average of 10 analysts surveyed by Bloomberg. Nissan reported sales jumped 19 percent in May, beating estimates for an 11 percent increase.

Chrysler sales rose 17 percent to 194,421 vehicles in May, Auburn Hills, Michigan-based automaker said in a statement. The third-largest U.S. automaker was projected to report a gain of 14 percent, the average of eight analyst estimates.

“Our Jeep sport-utility vehicles and Ram pickups continued to do well in May as our dealers reported brisk May sales over five weekends and the Memorial Day holiday,” Reid Bigland, Chrysler Group’s U.S. sales chief, said in a statement. The Auburn Hills, Michigan-based automaker’s Jeep brand gained 58 percent while its Ram pickups rose 17 percent increase, the company said.

Industry Outlook

Both automakers forecast an annualized sales pace higher than the average pace of analysts surveyed by Bloomberg who projected a 16.1 million selling rate pace, in line with full-year projections.

GM forecast an annualized light-vehicle sales pace of 16.5 million while Chrysler forecast an annualized sales pace of 16.9 million, including medium-duty and heavy trucks, which typically account for at least 200,000 sales a year.

While U.S. auto sales exceeded 16 million from 1999 through 2007, domestic automakers weren’t consistently profitable. This time, pricing discipline and lower costs are producing steady income for Chrysler and GM, five years after their bankruptcies, and Ford, which financed its own restructuring.

Other Gains

Vehicle deliveries in the U.S. may have risen 6.5 percent to 1.54 million, the average of estimates compiled by Bloomberg.

Toyota Motor Corp. may see a jump of 8.1 percent, analysts said.
Honda Motor Co. may report a 4.5 percent increase.

The gains continue the resurgence of the U.S. auto market, half a decade after the near-death of the U.S. auto industry forced restructurings that led to fewer brands and factories and more flexibility in labor contracts. The automakers’ margins also reflect the financial impact of increased U.S. energy output, widely available credit and management’s resistance to the heavy discounting car companies long used to prop up sales at the expense of profit.

The result is a lineup of U.S.-made cars and trucks that compare favorably with vehicles made by Toyota, Honda and other foreign manufacturers — showing how far the industry has come since June 2009, when GM filed a government-backed bankruptcy one month after Chrysler’s Chapter 11 filing.

‘Different Time’

“Short of calling 2009 and bankruptcy a lucky break, it’s two different companies, different management, different products,” said Kevin Tynan, auto analyst for Bloomberg Industries. “It’s very easy for the consumer to look at it and say, ‘This is different; it was a different time and these cars are at least worthy of my consideration.’”

Testament to Detroit’s comeback is GM, which is growing even as it moves this year to recall 14 million vehicles in the U.S., including 2.59 million small cars no longer in production for a faulty ignition switch linked to 13 deaths — suggesting buyers see the flaws as a legacy of the past company, rather than a defining moment of today’s GM.

“There’s some risk associated with the recalls, but it hasn’t been evident in GM’s sales numbers so far,” said Jeff Schuster, senior vice president of forecasting for researcher LMC Automotive of Troy, Michigan. “The jury is still out, but at this stage, it’s not derailing their momentum.”

Now Detroit is producing some of the most competitive vehicles in a generation. Ford’s Fusion has been a critical favorite, closing the gap against top Japanese models in the competitive family-sedan segment. Chrysler’s Jeep, with its updated Grand Cherokee and smaller Cherokee, is outpacing the robust growth of the market for sports-utility vehicles. Grand Cherokee deliveries rose 13 percent to 18,068 and Chrysler sold 15,992 of its Cherokee, which debuted last fall. Chrysler’s Town & Country minivan rose 37 percent to 14,799 and the Dodge Grand Caravan, rose 10 percent to 14,232 deliveries in May.

Chrysler’s strength was its trucks and SUVS, as car sales fell 27 percent, hurt by the older version of the 200 and the outgoing Avenger. The 200 is being replaced by a thoroughly revamped model which began reaching dealers last month. Sales of the compact Dodge Dart rose 16 percent to 8,644.

Challenges Ahead

Plenty of challenges remain, including the arrival of upstarts like Tesla Motors Inc.’s sleek, electric Model S and Google Inc.’s steering-wheel-free driverless car.

More immediately, Detroit must navigate the rising tide of recalls that could threaten freshly rebuilt reputations. Total recalls in the U.S. have reached almost 23 million, the most since 2004’s 30.8 million. And June has just begun.

Even with recall-related risks and growing competition from the likes of South Korea’s Hyundai Motor Co. and Kia Motors Corp., the Detroit Three automakers are as capable as they’ve ever been in one of the world’s most fiercely contested industries, said Harry J. Wilson, a member of President Barack Obama’s Automotive Task Force that led GM and Chrysler through bankruptcy in 2009.

“The Big Three are holding their own and actually increasing share,” Wilson, now CEO of restructuring adviser Maeva Group LLC, said May 22 at a Brookings Institute forum in Washington, D.C.

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Fiat Chrysler Says Performance of US Operations Crucial

Fiat Chrysler Automobiles Chief Executive Sergio Marchionne said on Sunday a good performance by its U.S. operations was crucial for the success of the company’s recently announced business plan, according to Reuters.

The carmaker launched a breakneck global growth effort last month built around its upmarket Alfa Romeo, Jeep and Maserati brands. Under the 2014-2018 business plan, it aims to boost sales by 60 percent and increase net profit five-fold by 2018.

“The execution of the (Fiat Chrysler Automobiles) business plan announced on May 6 depends on the fact that the U.S. operations perform well,” Marchionne said at a business event in the Italian town of Trento.

Marchionne said the company needed cash from Chrysler’s U.S. operations to fund its strategy in Europe, where Fiat was still battling with a weak and fragile economic recovery and over-capacity of the market for mass-market brands.

Chrysler filed for bankruptcy in 2009 and received a U.S taxpayer-funded bailout. Fiat took over the U.S. automaker at the time and completed the buyout at the beginning of this year to become the world seventh-largest carmaker.

The group is preparing to move its main listing from Milan to New York by the end of this year.

Marchionne said Chrysler’s financial strength and commercial clout overseas would help Fiat boost sales of Alfa Romeo, which will build eight new models by the end of 2018 thanks to investments worth 5 billion euros ($6.8 billion).

“On Friday I saw the prototype for one of the new models engineers are developing in secret, and I can say we are on the right track,” he said, adding that the model would probably be unveiled in the third quarter of next year.

Marchionne confirmed that all Alfa Romeo cars would be produced at Italian plants, at least until 2018, and said he would ask the government of Prime Minister Matteo Renzi to take measures to facilitate exports.

“I am not asking for financial aid. I am asking for logistic, regulations … changes to help exports,” Marchionne said, lamenting that he had not received any such help from Renzi’s predecessors.

Marchionne, who in the past ignored opposition from Italian labour unions and industry lobby Confindustria to negotiate company-level job contracts at Fiat plants, voiced support for the 39-year-old Renzi, who took office in February.

“I like Renzi very much, I hope he will find support for his agenda … it is the only agenda we have both in Italy and in Europe,” Marchionne said.

Renzi has promised to try to focus euro zone policies on growth and employment and away from austerity during the six months that Italy will hold the rotating European Union presidency starting in July.

“The austerity that came from Germany doesn’t make any sense for Europe now,” Marchionne said.

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Fiat’s Growth Plan Is Achievable, Marchionne Says

Via The Wall Street Journal:

The ambitious volume growth targets in Fiat Chrysler Automobiles NV’s five-year plan presented earlier this month are achievable, Chief Executive Sergio Marchionne said on Tuesday.

“I wouldn’t have put them down if they weren’t achievable,” Mr. Marchionne said at an event to commemorate the 10-year anniversary of the death of former Fiat Chairman Umberto Agnelli.

Earlier in May, the company’s top executives rolled out a five-year plan that projects big gains for a revamped Alfa Romeo sports-car brand, its Jeep sports-utility line and a repositioned Chrysler focused on mass-market sales. Fiat Chrysler aims to increase yearly vehicle sales by 60% to 7 million by 2018.

The relaunch of Alfa Romeo is the most challenging part of the plan, Mr. Marchionne said.

The CEO said that the financial targets he laid out for 2014 also are achievable.

He added he isn’t worried about the market’s negative reaction to the plan and he is convinced the stock will soon recoup losses sustained since the plan’s presentation on May 6. Fiat shares have lost 8.4% since the plan’s presentation.

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Fiat Chrysler Will be OK if it Misses Lofty Targets: Marchionne

Via Reuters

Fiat Chrysler Automobiles (FIA.MI) Chief Executive Officer Sergio Marchionne said the company will be much stronger than it is today at the end of his plan to sell 7 million cars by 2018, even if it misses the targets he set forth last week.

“The targets are the targets. But even if I miss it by 10 percent, from where I am today, it’s like (the) midget and the Jolly Green Giant,” Marchionne said at the dedication of a new transmission plant in Tipton, Indiana, on Tuesday.

His suggestion was that Fiat Chrysler would prosper, whether or not it falls a bit short of meeting some of his lofty goals.

The Green Giant, mentioned with a touch of humor by Marchionne, is the towering animated character with a deep “Ho, Ho, Ho!” long used to advertise a brand of canned and frozen vegetables produced by General Mills.

Last week Fiat shares fell 13.5 percent as Marchionne revealed a five-year plan that calls for the global sale of 7 million vehicles from 4.4 million in 2013 and a fivefold increase in net profit.

Many Wall Street analysts said they were concerned that Fiat Chrysler would be unable to meet the ambitious goals.

Marchionne said the targets were to spur his troops to greater heights after the first five-year plan, from 2009 to 2013, that righted a near-bankrupt company to one that will be introduced on the New York Stock Exchange late this year as the seventh-largest car company in the world.

“People think I do these plans for the benefit of the capital markets. That is the irrelevant portion of the pitch.

“The exercise of leadership requires the setting of some pretty bold objectives. The house needs direction. The plan is a structure that provides direction. So don’t quibble about whether I sell 400,000 Alfas or I sell 382,000.”

The company also plans to sell 150,000 Alfa Romeo cars in North America by 2018. It now sells no Alfa Romeo models in the United States or Canada.

Fiat shares fell 3 percent on Tuesday to 7.25 euros, but are up 22 percent since the start of the year and the announcement that Fiat had sealed a deal to buy out Chrysler’s minority owner.


Fiat Chrysler may expand Jeep production in United States by expanding existing plants, Marchionne also said.

“It may require the expansion of some of our sites. I can’t deal with the volumes at issue now.”

U.S. sales of Jeep, Fiat Chrysler’s SUV brand, increased 46.5 percent through April and existing Jeep plants in Toledo, Ohio and Detroit that make the profitable Wrangler and the Grand Cherokee are at production capacity.

“We’re looking at issue,” Marchionne said of getting more Jeep production in the United States.

Fiat Chrysler has plans to make Jeep at a plants in China and Brazil, but not in India, Marchionne said.

Globally, by 2018, Fiat Chrysler plans to produce 1.9 million Jeep models. It also targets sales of 1 million Jeeps this year, up from 732,000 in 2013.

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