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Wiring Problem Spurs Chrysler Recall Of 895,000 Jeep And Dodge SUVs

Wiring Problem Spurs Chrysler Recall Of 895,000 Jeep And Dodge SUVs

By Jerry Hirsch, Los Angeles Times

Chrysler Group is recalling about 895,000 Jeep Grand Cherokee and Dodge Durango sport-utility vehicles because of a wiring problem that could start a fire.

The automaker said if one of these vehicles needs a repair that includes servicing the vanity mirror and/or headliner, the wiring — located inside the sun visor — may be subject to short-circuit and fire if not appropriately reassembled by the dealer. The headliner is the upholstered roof on the interior of the vehicles.

But the problem has not been reported in vehicles that have not had the headliner or vanity mirror serviced.

Chrysler said it knows of three injuries linked to the problem.

The recall campaign includes 2011-14 Jeep Grand Cherokee and Dodge Durango models. An estimated 651,000 vehicles are in the U.S.; 45,700 are in Canada; 23,000 are in Mexico; and 175,000 are outside of North America.

Dealers will install a spacer containing a guide that will keep the lines properly routed, preventing a potential short-circuit during reassembly. The automaker said it will do the work on all of the recalled vehicles, regardless of whether the vanity mirror and/or headliner has been serviced.

This recall brings the number of vehicles called back by automakers in the U.S. to about 40 million so far this year, surpassing the previous high of 30.8 million set in 2004.

General Motors, which has had problems with ignition switches in a wide selection of its vehicles, accounts for about 26 million of the recalled autos. But there also have been large recalls by Toyota, Ford, Honda, and others.

AFP Photo/Geoff Robins

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U.S. Auto Sales Best Expectations For June

U.S. Auto Sales Best Expectations For June

New York (AFP) – Leading automakers, including scandal-plagued General Motors, Tuesday reported better-than-expected June auto sales in the U.S., an indication of higher consumer confidence.

Three of the four biggest auto sellers in the U.S. — GM, Toyota and Chrysler — notched increases from the June 2013 period, while Ford Motor reported a smaller decline than expected.

The companies reported lower sales in June than in May, when overall industry sales rose 11.4 percent from the year-ago period.

Though all the reports were not yet in Tuesday, the early indications pointed to a much better performance than expected, said Alec Gutierrez, a senior analyst at Kelly Blue Book.

“It’s an indication of consumer confidence. It’s the result of the unemployment rate continuing to come down slowly but surely,” he said.

Gutierrez said some consumers also may be moving up purchases to take advantage of favorable financing in anticipating that the U.S. Federal Reserve will raise interest rates in 2015.

“If interest rates start to creep up, that could have a negative consequence on some of the momentum we’re seeing,” he said.

General Motors, the largest U.S. automaker, eked out a one percent rise in sales to 267,461 vehicles compared with June 2013, much better than the 8.5 percent decline forecast by online car shopping site Edmunds.com.

“June was the third very strong month in a row for GM, with every brand up on a selling-day adjusted basis,” said Kurt McNeil, US vice president for sales operations. “In fact, the first half of the year was our best retail sales performance since 2008, driven by an outstanding second quarter.”

GM said the month’s result was the best June since 2007, suggesting that consumers were continuing to overlook the automaker’s travails.

GM is mired in government probes following its delayed recall of 2.6 million vehicles for an ignition-switch problem linked to 13 deaths. The automaker Monday recalled 8.4 million additional vehicles, bringing total recalls this year to a record 30 million.

“While consumers are definitely aware of the recall and concerned, I think they view the actions of GM as proactive and of them standing behind their product,” said Gutierrez.

In addition, Gutierrez noted that today’s fleet of GM products is not the same as those with the failed ignition switches, which were on models between 2003 and 2011.

Chrysler reported a nine percent increase in U.S. June auto sales as its Jeep and Ram brands again scored strong gains.

Chrysler, a unit of Italian company Fiat Chrysler, said it sold 171,086 vehicles last month, its best June sales since 2007.

The rise topped the 6.3 percent increase projected by Edmunds.com.

Chrysler, the number-three U.S. automaker, pointed to especially robust year-on-year increases for the Jeep brand (+28 percent) and the Ram Truck line (+14 percent).

Chrysler said sales of its Fiat brand rose 11 percent in June.

“In spite of two fewer selling days in June versus a year ago, we were able to increase our sales nine percent and post our strongest June sales in seven years,” said Reid Bigland, head of U.S. sales at Chrysler.

Ford reported June U.S. sales of 222,064, down six percent from June 2013 but still better than the 6.5 percent decline projected by Edmunds.com.

“Both the Fusion and Transit Connect set records in June, continuing their sales momentum,” said John Felice, Ford vice president for U.S. marketing, sales and service.

Japanese auto giant Toyota reported an 11.9 percent rise in auto sales to 201,714 units, much better than the 1.3 percent rise projected by Edmunds.

“Sales in the first half of 2014 indicate a steadily recovering industry, and we expect this pace to increase as we move into the second part of the year,” said Bill Fay, Toyota division group vice president and general manager.

AFP Photo/Geoff Robins

Chrysler Posts $690-Million, 1st-Quarter Loss

Chrysler Posts $690-Million, 1st-Quarter Loss

By Brent Snavely, Detroit Free Press

DETROIT — Chrysler lost $690 million during the first three months of the year because of costs of repaying debt and repurchasing shares held by a UAW trust.

The Auburn Hills, Michigan, automaker said it spent $504 million to repay debt to the UAW Retiree Medical Benefits Trust and also recorded a $672-million charge to cover the cost of purchasing shares held by the trust.

For the first three months of the year, Chrysler would have earned $486 million without those expenses of nearly $1.2 billion. That’s almost triple the $166 million profits the company reported for the same period a year ago.

The charges are part of a $4.35 billion deal struck between Fiat, Chrysler and the UAW trust that paved the way for Fiat to own all of Chrysler. It was the first time Chrysler reported a quarterly loss since the second quarter of 2011.

“I think we are going to see a strong improvement in the second quarter, but we are going to have a back-loaded second half,” said Richard Palmer, Chrysler’s chief financial officer, because of the launch of the 2015 Chrysler 200 sedan.

Palmer said Chrysler began shipping the all-new Chrysler 200 last week. The 200 is a midsize sedan that is substantially better than the outgoing model.

Chrysler continues to report its financial results on a stand-alone basis even though it is fully owned by Italian automaker Fiat because of outstanding bonds on the U.S. market.

The automaker’s first quarter revenue rose 23 percent to $18.9 billion. Chrysler’s total cash decreased to $12.4 billion from 13.3 billion at the end of 2013. Chrysler’s cash declined because the automaker also made a $1.9 billion payment to the UAW trust as part of Fiat’s acquisition agreement.

Palmer said Fiat and Chrysler eventually wants to restructure its bond debt that is due over the next two years but is still weighing its options.

“We clearly need to look at simplifying the capital structure of the group at an FCA level,” Palmer said. “We are looking to diversity our debt between Europe and the U.S.”

The Auburn Hills automaker’s earnings results come less than a week after Fiat and Chrysler CEO Sergio Marchionne presented an ambitious five-year strategic plan that calls for global sales of the combined automaker to increase global sales from about 4.4 million to 7 million cars and trucks by 2018.

Fiat’s stock fell 12 percent last Wednesday, the day after Marchionne presented the plan.

“We’ve had a phenomenal run in 2014 … and I am not surprised that people took some money off the table,” Marchionne said last week. “The plan is aggressive.”

Fiat’s stock fell 7 cents, or 0.86 percent, Monday to close at 7.47 euro per share.

Chrysler’s first quarter performance was aided by the introduction of the Jeep Cherokee, brisk sales of its Ram pickups and a U.S. industry that continues to see gradual sales increases.

Globally, Chrysler sold 621,000 new cars and trucks during the first three months of the year, up 10 percent from a year earlier. In the U.S., the company’s market share grew to 12.5 percent for the first quarter, up from 11.4 percent last year.

Chrysler also confirmed previous guidance for the year that it will earn between $2.3 billion and $2.5 billion this year before one-time charges and world-wide shipments of 2.8 million vehicles.

Last week Fiat reported a first-quarter loss of 319 million euros ($444 million) during the first three months of the year.

Fiat also was affected by a 315 million euros ($418 million) charge related to the cost of paying the UAW Retiree Medical Benefits Trust for the remaining Chrysler shares and the devaluation of Venezuela’s currency.

Fiat and Chrysler announced a deal on January 1 that called for the automakers to acquire the 41.5 percent of Chrysler owned by the UAW Trust for $4.35 billion. That deal closed on January 21.

Now, the two companies are working toward the completion of the merger and a name change to Fiat Chrysler Automobiles. That name, along with an exchange of Fiat shares for shares in Fiat Chrysler Automobiles, will be up for a vote by Fiat shareholders this summer.

Fiat and Chrysler are hoping to list the stock of the combined company under the symbol FCA on the New York Stock Exchange by October 1.

The company headquarters will be located in London, which will help Marchionne avoid political backlash both in Italy and the U.S.

“It’s clear that … group executive functions, the board, my office, and some of my functions need to operate out of London,” Marchionne said during a news conference for CNH Industrial, an agricultural equipment manufacturer that he also leads. “That doesn’t mean I give up my operating responsibilities in the U.S. I will still do that.”

AFP Photo/Stan Honda
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Chrysler Recalls SUVs Worldwide To Fix Brake Problem

Chrysler Recalls SUVs Worldwide To Fix Brake Problem

Washington (AFP) – Chrysler said Wednesday it was recalling almost 868,000 sport-utility vehicles worldwide to fix a brake corrosion problem.

Chrysler said it had launched an investigation after customers complained about stiff brake-pedal action, which was linked to one accident but no injuries.

An estimated 867,795 Jeep Grand Cherokee and Dodge Durango SUVs of the model years 2011-2014 will be called in to install shields to protect brake boosters from corrosion caused by water exposure.

“Should water enter the boosters through corroded joints — a previously unseen occurrence — brake function may be compromised if the water freezes,” Chrysler said.

The recall affects an estimated 644,354 customers in the United States, 42,380 in Canada, 21,376 in Mexico and 159,685 in other countries, said the unit of Italian group Fiat Chrysler Automobiles.

AFP Photo/Stan Honda