Tag Archive | "Marchionne"

Marchionne Says He Doesn’t Plan to Testify at July Hearing

Sergio Marchionne, Fiat Chrysler Automobiles NV’s chief executive officer, said he doesn’t intend to speak at the hearing the U.S. National Highway Traffic Safety Administration set for July 2, reports Bloomberg Business.

“We have a person who is responsible for regulatory compliance,” he said on the sidelines of an event Tuesday evening in Detroit. “He’s much better briefed than I am.”

NHTSA on Monday scheduled a rare public hearing into how Fiat Chrysler is handling 20 recalls, covering about 10 million vehicles. NHTSA Administrator Mark Rosekind said it was a pattern of potential violations, rather than a specific recall, that brought the unusual action.

NHTSA has become more aggressive after being criticized by Congress for failing to be more active before last year’s revelation that about 2.6 million General Motors Co. cars had a known ignition-switch defect that went unrecalled for years. Regarding Fiat Chrysler, the agency said it has had complaints from consumers about the absence of recall notifications, the lack of parts when people schedule repairs and “misinformation from dealers.”

Marchionne said Fiat Chrysler has tried to comply with the recalls but struggles, like all automakers, to get vehicle owners to care.

“We have worked as hard as we could to try and make the recalls work,” he said. “One of the things I cannot do is somehow force customers to come in and bring their cars. I just can’t. And the repair rates of some of these recalls are either at or above industry average.”

The auto industry, he said, will adapt to the new regulatory environment.

New Phase 

“We’re entering a new phase of regulatory oversight,” he said. “We need to work with the agency to determine the proper level of cooperation. The real issue is that the process of adjusting to this new regulatory environment is going to be painful. We’re not used to this.”

Fiat Chrysler shares rose 0.1 percent to $15.62 at 9:38 a.m. New York time. They gained 35 percent this year through yesterday.

FCA US, the Auburn Hills, Michigan-based unit of London-based Fiat Chrysler, owns the Chrysler and Jeep brands. It was given until June 1 to turn over documents about its recall progress and could face fines of $7,000 a day for failing to cooperate with NHTSA’s special order.

“The average completion rate for FCA US LLC recalls exceeds the industry average and all FCA US campaigns are conducted in consultation with NHTSA,” the automaker said Monday in an e-mailed statement. “The company will cooperate fully.”

Rosekind declined to give an industry average after the FCA statement. He said earlier he was unhappy with the completion rate of recall repairs for a fuel tank defect on some Jeeps.

NHTSA rarely schedules public hearings on recalls. The agency usually negotiates with automakers behind the scenes over the scope of a recall, timing and potential remedies. NHTSA’s last such hearing on a recall was in 2012, for a single fix by Wildfire Motors, a small motorcycle importer.

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U.S. Regulator to Chrysler’s Marchionne: Get Act In Gear on Jeep Recall

U.S. government safety regulators on Thursday told Chrysler Group LLC Chief Executive Sergio Marchionne that the company “have to get their act in gear” to speed up repairs of recalled Jeep SUVs that face a heightened fire risk, reported Reuters.

David Friedman, deputy director of the National Highway Traffic Safety Administration, was asked by reporters if he was satisfied with Chrysler’s performance in adding trailer hitches to affected Jeep SUVs to protect them in lower speed rear-end crashes.

“No. In fact, this morning I sent a letter to the chairman and CEO of Chrysler telling them they have to get their act in gear. They have to make sure they’re getting those parts in the hands of consumers,” Friedman said.

Chrysler is a unit of Fiat Chrysler Automobiles. Marchionne is chairman and CEO of Chrysler Group as well as CEO of Fiat Chrysler.

Earlier this month, Chrysler said it was intensifying its effort to reach owners of the 1.56 million older model recalled Jeep SUVs because so few were bringing them in to dealerships to have the trailer hitch assemblies installed.

Chrysler spokesman Eric Mayne on Thursday said the company has again stepped up its efforts to reach owners. Only about 137,000 of the 1.56 million owners have shown up at dealers to have trailer hitch assemblies installed, Mayne said.

As of Thursday, the Chrysler spokesman said, the company has 488,000 trailer hitch assemblies in stock.

Still, on Thursday, Friedman of NHTSA said, “They’ve told us they have nearly 400,000 parts and yet we’re getting complaints from consumers saying the dealers are telling them there aren’t any parts. Something is wrong there.”

Chrysler is committed to the safety of drivers and passengers in its products, the spokesman said.

“Chrysler Group leads the industry with a recall-repair completion rate of nearly 80 percent. The industrywide average is approximately 70 percent,” Mayne said.

After initially resisting NHTSA’s requests for a recall, Chrysler in June 2013 announced the recall of 1.56 million Jeep SUVs. They were the model years 2002-2007 Jeep Liberty and 1993-1998 Grand Cherokee, with rear fuel tanks.

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Marchionne’s Rebadged Chrysler Models May Fail to Stem Fiat’s Sales Slump

Fiat SpA’s integration with Chrysler Group LLC faces its first test with European buyers this week, when Chief Executive Officer Sergio Marchionne introduces Chrysler models with Fiat nameplates at the Geneva auto show.

Marchionne is counting on the rebadged models to keep customers walking into the showrooms as he holds off on new Fiat models until the second half. Marchionne, who boosted Fiat’s stake in Chrysler to 25 percent last month, is withdrawing the Chrysler brand from continental Europe, reported Bloomberg.

“Marchionne is trying to make a virtue out of necessity,” said Marco Santino, an analyst at A.T. Kearney in Rome. “While pure rebadging strategies have never worked well, Lancia and Fiat dealers will at least have some new products to show this year.”

Marchionne said Feb. 15 that Fiat had “repositioned” model launches until the second half because he doesn’t expect Europe’s car market to start recovering before then. Fiat forecasts a 3 percent decline for the European market this year. The company’s European share shrank to 7.6 percent in 2010 from 8.7 percent in 2009, according to industry group statistics.

“Fiat is playing defense in Europe, it has no major product push throughout the year,” said Jochen Gehrke of Deutsche Bank AG, who’s ranked No. 1 among Fiat analysts tracked by Bloomberg. The rebadged Chryslers may only provide “niche” sales, he said. Gehrke expects Turin, Italy-based Fiat to lose market share in Europe this year.

Three of the five cars Fiat will introduce this year are derived from Chrysler models, including the Lancia Thema, which is a European version of the Chrysler 300, and the Fiat Freemont, which is based on the Dodge Journey. Fiat will unveil the cars at the Geneva Motor Show tomorrow. The five-door Lancia Ypsilon is the only all-new car the company will show.

Sales of the Thema and other rebadged Chrysler models in Europe may give the carmaker an “incremental” sales bump without a lot of extra cost, said Jim Hall, an industry analyst with Birmingham, Michigan-based 2953 Analytics.

“It does allow them to firm up Lancia, and Lancia has had a tough time,” Hall said. The strategy is “a ‘win’ in that there’s not a lot of investment.”

Excluding the Ferrari and Maserati luxury brands, the Italian carmaker lost about 380 million euros in Europe last year, Gehrke said. The company had 2010 operating profit of 1 billion euros in Latin America, he estimates.

“Fiat needs to sell at least 10 percent more cars in Europe this year in order just to break even,” said Gehrke, who last month cut his rating to “hold” from “buy.”

The Italian company’s shares have more than doubled over the past 12 months, making them the best performers on the eight-member Bloomberg Europe 500 Autos Index in the period. Fiat spun off its industrial business on Jan. 1. Fiat slumped as much as 0.6 percent to 6.74 euros and was down 0.3 percent as of 9:10 a.m. today in Milan trading.

Fiat doesn’t give specific forecasts for Europe, where it gets 60 percent of its revenue. Marchionne has said he expects the carmaker to break even in Europe by 2013. A company spokesman declined to comment on European targets for this year.

Marchionne on Feb. 15 said Fiat’s product plan for 2011 may “even be too aggressive,” as European demand will remain “structurally weak.” Fiat will offer a total of five new cars this year, compared with nine in 2012 and 11 in 2013, according to a Dec. 17 presentation posted on its website. Those figures exclude light commercial vehicles.

Fiat’s investments will peak this year as the company sustains new product development, the CEO said Feb. 15. The company “will have a much fresher product line in 2012,” Gehrke said.

The revamped Lancia Thema features European touches like Italian leather made by Poltrona Frau SpA. Elisabetta Canalis, the Italian girlfriend of George Clooney, is also appearing in a series of Lancia ads, with the tagline, “Italian character meets American glamour.”

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Chrysler and Fiat Could Have Separate CEOs Within Two Years

Sergio Marchionne, who runs Italian automaker Fiat and U.S. carmaker Chrysler, said he expects to divide his leadership role at the companies within two years, reported the Associated Press.

Marchionne, installed by the U.S. government as CEO of Chrysler Group LLC following the automaker’s emergence from bankruptcy in June, said he was working “24-7” to manage the transfer of technologies from Fiat Group SpA to Chrysler, a key piece of the U.S. company’s revival. He declined to elaborate, but indicated he would not keep running both companies simultaneously for an extended period of time.

Marchionne attempted to keep expectations in check, telling the think tank audience that Chrysler’s recovery will be gradual and his leadership team was “not planning miracles” but committed to bringing “rapid change” to the automaker. He said Chrysler broke even in September and October and was dedicated to a five-year plan to overhaul the automaker’s vehicle lineup and double sales.

He credited the Obama administration with pushing the U.S. auto industry to restructure itself and said European nations need to do more to reduce overcapacity in the industry. In Germany, for example, he said not a single plant had been closed since World War II despite significant technological advances in recent decades.

Chrysler has received roughly $15 billion in aid from the U.S. government and through early November, the Auburn Hills, Mich., car company still had about $9 billion of the funds available. Chrysler has said it intends to repay the loans by 2014.

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