Tag Archive | "FCA"

Fiat Chrysler Sees May Industry Sales Flat to Up 0.7 Percent

The U.S. auto industry will remain on track for the best sales year in a decade despite industry growth being flat to up 0.7 percent in May, Fiat Chrysler Automobiles (FCA) said on Tuesday, reports Reuters.

FCA’s forecast is slightly more optimistic than those of Wall Street analysts surveyed by Reuters, who expected a 1 percent fall-off in May U.S. auto sales.

FCA’s U.S. sales rose 4 percent to 202,227 vehicles in May, its 62nd consecutive month of year-over-year sales growth, as it continued a turnaround after enduring a federally sponsored bankruptcy in 2009. Prior to the winning streak, the company had more than two years of monthly year-over-year sales declines.

It was the first time the company topped 200,000 in monthly sales since March 2007.

FCA’s Jeep sports utilities and Ram truck brands continued to pace the company. U.S. Jeep sales jumped 13 percent and Ram trucks rose 8 percent. But the Fiat brand continued to flounder, with sales down 19 percent.

Auto sales are viewed each month as an early snapshot of U.S. consumer spending.

There was one fewer selling day in May compared with a year ago.

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FCA Rolls Back Powertrain Warranty

AUBURN HILLS, Mich. — FCA US has reduced its powertrain coverage for 2016 model-year vehicles following a move by General Motors earlier this year to reduce its warranty coverage.

For 2016, FCA will offer a five-year, 60,000-mile powertrain warranty for its Chrysler, Jeep, Dodge, and Ram Truck vehicles powered by gasoline engines, according to a company statement. FCA had previously offered a warranty covering five years and 100,000 miles.The diesel warranty is unchanged.

“Following changes already made by competitors, FCA US is adjusting powertrain warranty coverage for 2016-MY vehicles to be more consistent with industry practices,” according to the statement.

The basic warranty, also known as bumper to bumper, remains at three years and 36,000 miles.

In March, General Motors also reduced its powertrain warranty to five years and 60,000 miles.

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FCA Stock Closes Ahead of Ford’s for 2nd Time in a Week

Shares of Fiat Chrysler Automobiles NV closed up 13 cents to $15.60 a share on Tuesday, a dime higher than Ford Motor Co. — the second time this week that shares of the Auburn Hills automaker have topped its Dearborn rival, reports The Detroit News.

Ford stock was down 8 cents Tuesday, dropping 2.6 percent during the past year, while FCA’s stock has gained nearly 75 percent since its Oct. 13 debut on the New York Stock Exchange. This week marks the first time since the listing that FCA’s stock has surpassed Ford’s.

Analysts say the stock price jump doesn’t mean much, since Ford’s market capitalization remains far ahead of FCA’s.

Ford’s relatively low stock price raised at least one question at Ford’s annual shareholders meeting last week in Delaware, but analysts remain optimistic about Ford’s fortunes through the rest of the year.

“They’ve had some medium-term pain because of some launch costs for some products,” said David Whiston, a senior equity analyst with Morningstar Inc. “But I think going forward, including this year, Ford has a lot of potential for some nice upside.”

That potential hinges on Ford’s most profitable vehicle, the new F-150 pickup. The automaker will reach full production at its two F-150 plants by the end of this quarter. Whiston said that, coupled with new models of the Edge and Lincoln MKX will help boost profit margins and stock price.

“I think things will start to change during the end of the summer,” said Barclays analyst Brian Johnson.

During Ford’s shareholders meeting, Roger Heymann, a shareholder from Rockville, Maryland, voiced concern over the company’s stock price. Executive Chairman Bill Ford responded by saying he checks the stock price daily, if not hourly.

“We’re on track for a very good year,” Ford said. “I believe the stock price will take care of itself.”

Efraim Levy, equity analyst at S&P Capital IQ, said in a recent note to investors that FCA’s stock should perform well, as profit and margins expand in 2015.

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Fiat Chrysler Seeks New Trial, Says April Award ‘Grossly Excessive’

Fiat Chrysler Automobiles has asked for a new trial following one that ended early in April with a Georgia jury awarding $150 million to the family of a 4-year-old boy killed in a fiery crash involving at 1999 Jeep Grand Cherokee, reported Reuters.

Evidence and the law did not support that verdict in April, the company’s lawyers said in a filing Thursday.

The filing with the Superior Court of Decatur County says the $120 million wrongful death award is more than 11 times the largest death award in Georgia history. The $30 million pain and suffering award is more than four times the largest award upheld in the state, it says.

The filing added: “The jury’s stunning and unprecedented damage awards are grossly excessive.”

The jury found Chrysler, now part of Fiat Chrysler Automobiles, was 99 percent at fault in the death of Remington Walden. The driver who slammed into the back of the Jeep Grand Cherokee was found to be 1 percent at fault.

Jeep was a brand of Chrysler and is now an FCA brand.

Attorneys for the Walden family argued that the placement of the Jeep’s fuel tank behind the rear axle made it more likely to cause a fire in the event of a rear-end crash, such as the one that led to the child’s death.

Newer Jeep SUVs do not have gasoline tanks located behind the rear axle.

U.S. safety regulators said last week they were ready to take action soon to accelerate recalls, including one for gas tank fires in Jeep SUVs.

The 1999 Grand Cherokee was not included in a June 2013 recall of 1.56 million Jeep SUVs as the National Highway Traffic Safety Administration and FCA had agreed to limit the recalls. The safety regulator had earlier pushed for a wider recall of 2.7 million Jeeps.

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Fiat Chrysler CEO Defends Jeep Safety

WASHINGTON — Fiat Chrysler Automobiles NV CEO Sergio Marchionne defended the safety of millions of Jeep SUVs recalled for possible gas tank fires, as a Georgia jury hears the case of a 4-year-old boy killed in a Jeep fire, reported The Detroit News.

In a 171-page January deposition obtained by The Detroit News, Marchionne said the automaker firmly believes the older Jeep SUVs with gas tanks located behind the rear axle are no more susceptible to fires than other SUVs.

“Our analysis of that data suggested these were defect-free vehicles, and that they performed exactly as the rest of the comparative class performed in the marketplace at the time. Our analysis suggests very clearly that this is not a defect,” Marchionne said in a three-hour session in downtown Atlanta on Jan. 9, as part of a suit brought by the family of Remington Walden, 4.

Under government pressure, Fiat Chrysler recalled an estimated 1.56 million 2002-07 Jeep Liberty and 1993-2004 Jeep Grand Cherokee SUVs for the problem in June 2013, and agreed to install trailer hitches to protect the gas tanks. In an abundance of caution, it sent letters to 2.27 million owners, though it is not clear how many are still on the road.

Fiat Chrysler notes the vehicles met safety requirements at the time they were built, and insists they are not defective. The company also agreed to conduct a customer service campaign for another 1.2 million 1999-2004 Grand Cherokees.

The recall came after the National Highway Traffic Safety Administration formally asked Chrysler to recall 2.7 million 1992-98 Jeep Grand Cherokees and 2002-07 Jeep Libertys, saying they were suspectible to gasoline fires resulting from ruptured gas tanks after severe rear-end crashes. The government initially blamed such collisions for the deaths of at least 51 people driving Jeep SUVs; they are now they are linked to at least 70 deaths.

The Detroit News first reported private talks between Transportation Secretary Ray LaHood, Marchionne and then-NHTSA Administrator David Strickland in 2013. The meeting in Chicago led to the trailer hitch remedy. Emails between Chrysler and NHTSA officials obtained by The Detroit News show the meeting was sought by Marchionne, who had offered to fly to various locations.

“The meeting would only be with the secretary and no other staff, as Sergio wanted,” Strickland said in an email to Chrysler’s senior vice president for external affairs.

In the deposition, Marchionne said he didn’t care who NHTSA brought to the meeting, “If they wanted to bring an army of people, they were welcome, but I was going to show up on my own,” he said. “I would never tell NHTSA who to bring to a meeting and who not to bring to a meeting.” He said he asked for the meeting to try to find a resolution.

Marchionne defended the “incredibly thorough review of the underlying data” and said the company had shared that data with NHTSA, saying it is “fundamentally not different than it would have been for any other competitor car in that class.”

He denied Chrysler wanted to settle the investigation because he was worried about the impact on sales. He acknowledged that there have been deadly fires in Jeep SUVs. “I think that there are unfortunate events surrounding the use of cars, and I find these deplorable,” Marchionne said. “I think it’s unfortunate, and people will suffer injury as a result of driving or riding in vehicles. But I don’t think there is the slightest evidence that Grand Cherokee or the class that we’re talking about here are defective.”

The trial is opening this week in Bainbridge, Georgia, in Decatur County Superior Court in the death of Remington, who died after the 1999 Jeep Grand Cherokee driven by his aunt Emily Newsome was hit in the rear by a 1997 Dodge Dakota. Newsome, who was driving the boy to tennis lessons, was waiting to turn left, when the driver of the Dakota struck the SUV at high speed, causing the fuel tank to burst.

Marchionne’s videotaped deposition is expected to be played in court.

Lawyers for Fiat Chrysler said in a court filing that the parents “allowed their child to ride in the vehicle after news and media coverage about the NHTSA investigation into the subject vehicle.” They argue that no warning “would have prevented Remi’s injuries in this incident.”

NHTSA has criticized Chrysler for the slow pace of fixes; the company didn’t start fixing them until August 2014, more than a year after they agreed to the recall.

However, NHTSA has acknowledged the hitches will not offer much protection in high-speed crashes. Its investigation did find they provide incremental safety benefits in certain low- and moderate-speed crashes. Chrysler has said since 2013 that the fix would not address high-speed crashes in which most of reported deaths have occurred.

NHTSA issued a consumer advisory in November that urged owners of the recalled Jeeps to get them fixed immediately. The letter came days after a 23-year-old pregnant woman from Ferndale was killed in a fiery crash on the Lodge Freeway in a recalled 2003 Jeep Liberty. Kayla White was killed when her Jeep was struck from behind at high speed, causing it to overturn and catch fire. She died of burns and smoke inhalation, an autopsy found.

NHTSA noted that the Jeeps were among the few vehicles on the roads with gas tanks in the rear of the vehicles. Prior to the 1970s, fuel tanks in most cars were located behind the rear axle, the safety agency said. After the investigaton into gas tank fires in Ford Pintos, most fuel tanks were moved in front of the rear axle.

Chrysler said that as of January, the company’s dealers had 58,600 repair kits on their shelves, and more than 313,000 kits in regional warehouses. To date, about 10 percent of the vehicles have had the recalls completed.

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Fiat Chrysler Paid CEO Marchionne $38 Million in 2014

Fiat Chrysler CEO Sergio Marchionne earned more than $38.06 million in 2014 when all of his bonuses and compensation are included, according to an annual report published by Fiat Chrysler Automobiles Thursday, reported Detroit Free Press.

An earlier version of this story said Marchionne’s total compensation for 2014 was about $7.2 million using Thursday’s currency exchange rates.

The amount of Marchionne’s total compensation includes a one-time “extraordinary incentive” in the form of a $30.04 million, onetime cash bonus using currency exchange rates as of Dec. 31 that was not included in the earlier story. In addition, Marchionne was awarded a $14.6-million bonus he will get when he retires or leaves the company and 1.6 million restricted Fiat Chrysler shares as long as shareholders approve the offer at an April 16 annual meeting.

The automaker’s board of directors granted Marchionne the additional bonuses because he “was instrumental in major strategic and financial accomplishments for the group,” in 2014.

“Most notably,” the board said, “through the CEO’s vision and guidance, FCA was formed, creating enormous value for the company, its shareholders, employees and stakeholders.”

Excluding the “extraordinary bonus,” Marchionne’s total compensation was $8.03 million (6.6 million euro), according to exchange rates on Dec. 31.

His total compensation included an annual salary of about $3.04 million (2.5 million euros), a $4.86-million annual bonus (4 million euros) and other compensation valued at about $139,000 (111,000 euros), according the exchange rate as of Dec. 31, 2014.

Marchionne is no longer eligible for a separate salary for running FCA US, the company previously known as Chrysler.

His total compensation for 2014 is vastly more than the $5 million Marchionne earned for his work as CEO of Fiat in 2013.

Last year, Marchionne led Fiat and Chrysler through a complete corporate transformation as he finally brought the two automakers together.

Fiat acquired a portion of Chrysler in 2009 and became the 100% owner of the Auburn Hills automaker in 2014. Marchionne restructured the company into a single automaker registered in the Netherlands in October — the same month the automaker began trading on the New York Stock Exchange.

The automaker’s stock price has soared more than 70% to $15.24 per share since Oct. 13 when the stock closed at $8.92 during its first day of trading.

John Elkann, who is chairman of Fiat Chrysler and is the great-great-grandson of the founder of Fiat, earned a total of $2.04 million (1.68 million euros) last year.

The automaker filed its annual report with the U.S. Securities and Exchange Commission on Thursday but did not disclose the salaries of its top officers in that report.

The SEC requires publicly traded companies based in the U.S. to disclose the salaries of its top five highest paid executives.

The compensation for Marchionne and Elkann far exceeded the compensation paid to any other board members. Fiat Chrysler Automobiles separately disclosed the compensation of its board of directors in a more complete annual report filed on the company’s corporate web site.

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