Tag Archive | "Fiat Chrysler Automobiles"

Takata Air Bag Recall Expands to Record 34 Million Vehicles


As part of an agreement with Takata, federal regulators expanded the recall of vehicles equipped with the company’s air bags to 33.8 million in the U.S., making it the largest safety recall in the nation’s history, reports Detroit Free Press.

The move essentially doubles the number of vehicles being recalled to replace potentially lethal air bags made by the Japanese supplier. At least six people have died and more than 100 have been injured from shards of metal from exploding air bags.

Takata, for its part, officially acknowledged the defects for the first time on Tuesday, even though 17 million vehicles with its air bags already have been recalled.

Mark Rosekind, recently appointed administrator of the National Highway Traffic Safety Administration, said no one knows how long it could take to fix the vehicles, but “it could take some years. … We intend to make sure at the end of this process there is a safe airbag in every vehicle.”

The NHTSA recall now involves 11 automakers, including the Detroit Three, most affecting 2002 through 2008 model years. Takata is partly owned by Honda, which has the highest percentage of recalled vehicles. The total number could change as automakers sift through the specs of all of their models to determine which ones contain any of the four defective inflators, which activate the air bags in a collision.

Many consumers will have to drive their vehicles for a long time before the parts are available to fix them, with the industry unable to manufacture replacement bags fast enough. They could also be waiting months for the notification their vehicle is subject to recall because automakers must prioritize vehicles at most risk based on their age and geographic location

The announcement is the second example in as many days of Rosekind cracking down on automakers to address safety on U.S. roads. On Monday, Rosekind announced he has scheduled a hearing in July for Fiat Chrysler Automobiles to explain their slow response in completing repairs in 20 different recalls.

NHTSA has been pushing for Takata to expand its air bag recall. Automakers had recalled about 17 million vehicles, many of them from Honda. The latest move largely makes this a national recall of vehicles from 11 automakers with vehicles that potentially have faulty inflators in the driver or passenger-side air bag.

“Up until now Takata has refused to acknowledge that their airbags are defective, that changes today,” said U.S. Treasury Secretary Anthony Foxx. “Takata has agreed to declare their air bag inflators are defective.”

Takata Chairman Shigehisa Takada, in a statement, said, “We are pleased to have reached this agreement with NHTSA, which presents a clear path forward to advancing safety and restoring the trust of automakers and the driving public.”

The supplier has also agreed to enter into a consent order with NHTSA to supply all related documents and information about the defective airbags and pledged full cooperation going forward.

In return, NHTSA has suspended more than $1 million in accumulated fines — $14,000 per day since February — for not responding to all NHTSA’s inquiries. The agency has not ruled out more fines in the future and there could be further civil penalties.

Initially the exploding air bags were considered a problem only in hot and humid climates but the recall has been expanded nationally as Takata and affected automakers continue to try to identify the root cause of the problem so they can fix it.

The recall has also expanded to cover both driver and passenger side air bags in more vehicles and regions.

Automakers with affected vehicles include Honda, Toyota, Ford, BMW, Fiat Chrysler Automobiles, General Motors, Mazda, Mitsubishi, Nissan, Subaru and the newly added Daimler Trucks. The automakers formed a coalition and hired independent engineering firm Orbital ATK to try to find the cause of the exploding air bags. Their investigation is in addition to those being conducted by NHTSA and Takata in an industry-wide effort to find the reason for the defect to make sure it is fixed properly.

NHTSA also is opening its own testing program to focus on ensuring the remedy is completely safe. Rosekind said while the replacement air bags are safer than the ones they replace, he cannot guarantee their long-term safety at this time.

“We are doing our best to keep focused on the investigation,” said former NHTSA Administrator David Kelly who was hired to oversee the investigation by the automakers. Efforts to determine the root cause are still in the early stages of testing, he said.

Safety officials warn consumers to keep checking their vehicle VIN number on the www.safercar.gov website because even some of the vehicles previously fixed – or excluded in the past — could be back on the recall list in the future.

Consumer who receive recall notices should call their dealer immediately.

“Folks shouldn’t have to drive around wondering if their airbag is going to explode in their face or if their car is going to be on another recall list,” said U.S. Sen. Bill Nelson, D-Fla., the top Democrat on the Senate Commerce Committee and a key figure in a congressional probe into the defective airbags. “We’ve seen the recall list double now to 30 million cars. Let’s hope Takata’s admissions today tells us the whole story.”

Rich Newsome, an attorney representing seven victims of faulty Takata air bags, including Corey Burdick, a Florida man disfigured and blinded in one eye by shrapnel from an exploding air bag in May, called it a victory for consumer protection.

But, he said, “today’s expanded recall is already too little, too late for people injured and their families. Hopefully today’s news will push the agenda for recall reform to the forefront and result in legislation that will help NHTSA identify these kinds of defects before regular families with defective cars are needlessly harmed in the future.”

Automakers say they will continue to work with NHTSA and share test results. Honda said many of the recalls announced Monday already were included in previous safety campaigns and the automaker is “reviewing the information released (Monday) to determine what new actions may be required.”

Honda owners can check their recall status at www.recalls.honda.com or call 800-999-1009. Acura owners should go to www.recalls.acura.com or call 800-382-2238 and press option 4.

“A recall of this scope illustrates the potential for massive automaker expense and consumer inconvenience when a common, mass-produced part is defective,” said Karl Brauer, analyst with Kelley Blue Book.

“While this is the largest consumer recall in history it’s likely we’ll see future vehicle recalls of similar, if not larger, size as the automotive industry becomes more globalized.” Brauer said.

Takata boosted production to 450,000 replacement kits per month in March, up from 350,000. Other suppliers are also ramping up capacity to meet the demand the recall has created as the industry works to address the problem collectively.

Autoliv, another global supplier of airbags, said Tuesday it could make more airbag inflators than it has already promised to the industry.

In January, Autoliv committed to providing several automakers with as many as 25 million airbag inflators and could begin delivering them later this year.

“Our focus has really been to help the industry and the customers in this situation and clearly if we would be asked to supply more we would work to do that as rapidly as we could,” said Thomas Jonsson, spokesman for Autoliv.

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Ford Executive Indicates Desire for Level Playing Field on Labor Costs


Ford Motor Co’s Americas chief indicated on Wednesday that the No. 2 U.S. automaker will be looking to bring its labor costs in line with those of its smaller rival Fiat Chrysler Automobiles when it opens talks this summer with the union representing its hourly workers, reported Reuters.

Joe Hinrichs, speaking at a Bank of America Merrill Lynch conference, said the subject of entry-level workers, who are paid less than their veteran co-workers, will be a subject of talks with the United Auto Workers. Ford, Fiat Chrysler and General Motors Co will negotiate new deals to replace ones expiring in mid-September.

Hinrichs, who declined to discuss the pending talks in detail, said Ford needs to remain competitive in order to maintain its investment in U.S. plants, and pointed to the UAW’s desire for a deal that is similar at all three automakers in helping Ford lessen the advantages Fiat Chrysler gained during its 2009 bankruptcy.

As part of the bankruptcy reorganizations at GM and FCA, the UAW agreed to no cap on the number of entry-level workers those automakers could hire, while Ford, which did not enter bankruptcy, has a limit.

“Ideally, some of those discrepancies that exist because of the bankruptcies at two of our competitors will play themselves out as part of that pattern bargaining process,” said Hinrichs, who added the talks would be a “delicate balance.”

Asked what Hinrichs meant, a Ford spokeswoman said, “We need to have a total labor cost that is competitive with other automotive manufacturers producing in the U.S. We’re open to discussing many options with our UAW partners.”

Entry-level workers earn about $16 to $19 an hour compared with veteran workers, who make up to $28.50 an hour. Twenty-eight percent of Ford’s hourly U.S. workforce are entry level, while GM is at 19 percent and FCA is at 43 percent.

UAW leaders have said they want to bridge the gap between the entry-level and veteran workers’ pay.

Labor cost estimates show that Ford pays its workers an average of $57 an hour, including benefits, compared with $58 at GM and $48 at FCA, according to the Center for Automotive Research.

“There’s certainly an understanding that for the investment levels to continue and the great job growth numbers that we’ve had in the U.S. to continue, we have to maintain a level of competitiveness that makes sense,” Hinrichs said.

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GM Sales Jump 18.3%, Ford Up 15.3%, FCA Up 14% in January


Detroit’s automakers on Tuesday all posted strong sales increases in January compared to a year ago, led by General Motors Co.’s 18.3 percent gain — its best January in seven years, reported The Detroit News.

Buyers took advantage of low gas prices, easy access to credit and stable feelings about the economy to buy vehicles, particularly full-size trucks, crossovers and SUVs. Better weather than a year ago also seemed to aid sales, which analysts expect will come in more than 10 percent higher than January 2014.

Ford Motor Co. saw January sales jump 15.3 percent to 178,351, while FCA US LLC, formerly Chrysler Group LLC, also posted a 14 percent sales gain in January.

GM said its U.S. sales to retail customers and fleet customers increased by 14 percent and 32 percent, respectively.

GM saw big gains from its Chevrolet brand, up 20 percent; GMC was up 28.6 percent and Cadillac had a 2.6 percent sales gain. Sales for Buick fell by 5.5 percent.

The Detroit automaker was boosted by big increases in pickup sales — up 42 percent year-over-year — and sales of crossovers and SUVs jumped 36 percent from January 2014.

“Consumers feel very good because more people are working, the U.S. economy is expanding and fuel prices are low,” said Kurt McNeil, GM’s U.S. vice president of sales operations, in a statement. “Consumer and commercial demand for trucks and crossovers is really driving our business, and our move into the small crossover segment with the Chevrolet Trax and Buick Encore, and mid-size pickups with the Chevrolet Colorado and GMC Canyon, was well-timed.”

Ford said its retail sales increased by 13 percent — the best retail sales month for Ford since 2004. The Dearborn automaker said passenger car sales to retail customers rose by 6 percent, utilities were up 10 percent and truck sales rose 23 percent.

Ford sold 54,370 F-Series pickups last month, up 16.8 percent in January, marking the best January for F-Series since 2004. Lincoln brand sales also jumped 10.8 percent.

FCA posted its best January sales since 2007 with 145,007 vehicles sold last month.

“We kicked off 2015 with a 14 percent increase in sales and extended our year-over-year sales streak to 58 consecutive months,” said Reid Bigland, FCA’s head of U.S. sales, in a statement. “In spite of some tough 2015 comparisons, we remain confident in our ability to post year-over-year sales increases on the back of strong retail demand for our products.”

FCA said its Chrysler, Jeep, Dodge, Ram Truck and Fiat brands each posted year-over-year increases, led by Jeep’s 22.9 percent increase. The company said 10 vehicles set January sales records including four Jeep vehicles. Ram pickup sales also jumped 14 percent.

Toyota Motor Sales USA Inc. said its sales jumped 15.6 percent in January, as light truck and Lexus brand sales set January sales records.

“This year is off to a strong start as the sales momentum we saw in 2014 continued into January,” Bill Fay, Toyota division group vice president and general manager, said in a statement.

Nissan Motor Co. Ltd. said its total U.S. sales rose 15.1 percent in January, with its Nissan division setting a January record with 94,449 sales, up 15.9 percent.

American Honda Motor Co. Inc. said it had record U.S. sales in January of 102,184, up 11.5 percent from a year ago. Its Honda brand set a January record with 90,202 sales, up 11.6 percent, while Acura brand sales increased by 10.7 percent.

Meanwhile, Hyundai Motor America said its January sales rose 1.1 percent to 44,505 vehicles, setting a January record. Kia Motors America also had record January sales of 38,299, up 3.5 percent year-over-year. Volkswagen of America Inc. posted flat sales of 23,504 in January.

TrueCar Inc., a car-buying and -selling marketplace, said it predicts U.S. auto sales will reach nearly 1.15 million vehicles in January, up 13.2 percent from January 2014. January 2015 had one extra selling day than January 2014. Kelley Blue Book estimated a similar increase of 12.9 percent, though it noted some final selling days of the month may have been hampered by bad weather in the East.

“Full-size trucks continue to thrive in 2015 and Kelley Blue Book anticipates sales will improve more than 10 percent in January alone,” said Alec Gutierrez, Kelley Blue Book senior analyst, in a statement. “Expect a strong push from Chevrolet Silverado, GMC Sierra, Ram and F-Series, especially when taking into consideration the low cost of fuel and the appeal of these recently redesigned core products.”

Many industry forecasters are calling for U.S. auto sales to reach 17 million in 2015 after hitting 16.52 million last year, up by nearly 1 million sales from 2013.

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FCA US Profits Drop in 2014 on One-Time Expenses


DETROIT – FCA US, formerly Chrysler Group, reported Wednesday a drop in net income to $1.2 billion for 2014, compared to a net profit of $2.8 billion in 2013, reported MLive.

That came despite a rise of 15 percent in revenue to $83.1 billion.

The Auburn Hills-based subsidiary of Fiat Chrysler Automobiles NV said the drop in profit was the result of special, one-time charges. Adjusted items included a $504 million loss stemming from debt repayment on a note held by the UAW Retiree Medical Benefits Trust, and from a $672 million charge for commitments associated with the January 2014 memorandum of understanding signed with the UAW.

The company said on an adjusted basis, net income was up 31 percent to $2.4 billion.

The company’s operating margin was 4.2 percent for 2014, with operating profits of $3.5 billion. FCA US’ operating margin in 2013 was 4.4 percent.

Market share in the U.S. grew 100 basis points to 12.4 percent.

Last week, FCA NV, the parent company of FCA US, reported net profit of 632 million euros, or about $717.4 million, for 2014, driven in part by strong sales of the Jeep brand. The company’s full-year revenues grew 11 percent to 96 billion euros, or about $109 billion.

FCA US’ global vehicle sales 15 percent to 2.8 million units in 2014. Sales in the U.S. were up 16 percent.

Also on Tuesday, FCA US also released a 14 percent rise for the month of January to 145,007 units.

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Former Chrysler Unit Recalls 66,819 Older Pickups for Clutch Issue


FCA US, the former Chrysler Group, said on Monday it is recalling almost 67,000 older-model pickup trucks equipped with manual transmissions globally for possible clutch problems that have been linked to one death, reported Reuters.

FCA, a unit of Fiat Chrysler Automobiles, is recalling an estimated 66,819 pickup trucks from model years 2006 and 2007 after engineers discovered clutch interlock switches may be equipped with spring wire that differs from wire used in previous switches, the company said.

The alternate wire may break, causing the vehicle not to start or in rare cases result in unintended movement when the ignition key is turned, the company said.

FCA said it is aware of one fatality related to the recall stemming from an accident. In May, the U.S. National Highway Traffic Safety Administration opened an investigation after the fatality.

In the incident, a young child was able to enter a 2006 Ram 3500 truck and start the ignition without the clutch depressed, according to documents filed with NHTSA. The vehicle then moved forward and struck and killed another child.

The recall covers certain Dodge Dakota, Dodge Ram 1500, 2500 and 3500, and Mitsubishi Raider pickups. Switches with the alternate wire were not used in any vehicles made before July 2005 or after June 2006.

The Dakota and Raider, built under contract for Mitsubishi, are no longer made.

An estimated 54,558 of the trucks are in the United States, 4,356 in Canada, 7,648 in Mexico and 257 outside of North America, FCA said.

Owner notification is expected to begin Feb. 13, FCA said. In the interim, customers are advised to follow recommended procedures for starting their vehicles, including activating the parking brake, placing the shift lever in neutral and pressing the clutch pedal before turning the ignition key.

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Fiat Says Merger into Dutch-Registered FCA Effective October 12


Italian carmaker Fiat said on Tuesday its merger into holding group Fiat Chrysler Automobiles (FCA) would be effective as of Oct. 12 after all conditions for the tie-up were met, reported Reuters.

Fiat completed the full buyout of its U.S. unit Chrysler this year and is now incorporating all its businesses under Dutch-registered FCA, paving the way for a U.S. listing of the world’s seventh-biggest auto group next week.

Fiat hopes the Wall Street listing will help fund an ambitious turnaround plan.

Fiat said no creditors had opposed the merger and the amount of money to be paid to shareholders that chose to sell their shares had not exceeded a 500 million euro ($631 million) cap set by the company.

Shares in FCA will start trading on the New York Stock Exchange on Oct. 13, Fiat said in a statement. The stock will also begin trading on the Milan bourse on the same day, subject to the market regulator’s authorization.

Current Fiat shares will last trade on the Milan bourse on Friday.

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