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Fiat Chrysler cuts 2018 outlook, shares tumble on weaker quarterly profit

MILAN — The news of former Fiat Chrysler chief executive Sergio Marchionne's death arrived Wednesday moments before the group reported a surprisingly heavy drop in profit. The death of one of the auto industry's most tenacious and respected CEOs overshadowed a big selloff in Fiat Chrysler shares. FCA's scheduled second-quarter earnings presentation, led by Marchionne's successor and former lieutenant Mike Manley, began on Wednesday afternoon with a moment of silence. As eulogies flooded in, FCA shares fell as much as 10 percent as investors digested an unexpected 35 percent fall in net profit, well below market forecasts. Marchionne rescued Fiat and Chrysler from bankruptcy after taking the wheel of the Italian carmaker in 2004 and he multiplied Fiat's value 11 times through 14 years of canny dealmaking. He was due to step down at FCA in April next year. "The best way to honor his memory is to build on the legacy he left us, continuing to develop the human values of responsibility and openness of which he was the most ardent champion," Chairman John Elkann added. On Saturday, FCA named Jeep division head Mike Manley, 54, as head of the world's seventh-largest carmaker, saying the Briton would execute a strategy that Marchionne had outlined in June. FCA has said Manley will work to ensure a "strong and independent" future for the group. Underlining the task facing Manley, FCA cut its full-year earnings outlook after the weaker-than-expected quarterly earnings. Having to deliver the bad news four days into his new job, Manley blamed the result on a weaker performance in China, a market that represents one of new CEO's immediate headaches. "The biggest challenges we face and frankly we're going to continue to face ... are all focused in China," Manley said. FCA has yet to make any significant inroads in China. In Marchionne's June plan, FCA pledged to boost production of sport utility vehicles and invest in electric and hybrid cars to double operating profit by 2022. It unveiled bold targets for Jeep, FCA's profit engine. FCA said adjusted earnings before interest and tax (EBIT) for the April-June period fell 11 percent to 1.7 billion euros ($1.99 billion), compared with 2 billion euros in a Reuters poll of analysts. Chinese demand slumped in the quarter ahead of a July cut in import duties, resulting in higher incentive spending and an increase in unsold vehicle stocks that "particularly affected Maserati," Manley said.

Marchionne's FCA-GM merger might come after Ferrari spinoff

Sergio Marchionne is continuing to rumble about working out a merger with General Motors, but don't expect anything big to happen before at least early next year. That's because Marchionne would likely wait for the Ferrari spin-off to be complete before beginning his next big deal, according to Automotive News. While the Ferrari IPO on the New York Stock Exchange is expected in the coming weeks, that only concerns 10 percent of the shares. The remaining 80 percent of stock is being distributed among shareholders in 2016. Piero Ferrari holds the final 10 percent with no intention to sell. This strategy allows FCA to claim 80 percent of the Prancing Horse's profits in the automaker's 2015 financial results. According to Automotive News, the tactic has other advantages, as well. FCA would be flush with cash by waiting for the spin-off to be complete, and it would keep Ferrari separate if a GM merger actually happens. Marchionne thinks Ferrari could be valued at over $11 billion in the IPO, and it could make FCA $3.3 billion richer when complete. Marchionne believes a combined FCA/GM could sell 17 million vehicles a year globally and rake in $30 billion in earnings. In the CEO's opinion, the two automakers are wasting money by developing components to do the same things on their vehicles. Although, so far the General's top execs are rebuffing all of his advances.

Junkyard Gem: 1975 Plymouth Fury Sedan

The Plymouth Fury was once among the most commonplace vehicles on American roads, with the 1970s being the most Furious decade of all. If you've watched a lot of Malaise Era cop shows, you've seen endless examples of the 1975-1978 B-Body Fury sedan; today's Junkyard Gem in Colorado is a civilian version with a very unusual combination of features and options. Though the 1975-1978 Fury is sibling to many much more famous B Platform Chryslers, including the Dukes of Hazzard General Lee and a lot of other highly revered Mopars of the late 1960s and early 1970s, it doesn't get the recognition it deserves today. Would the world be the same if Debbie Harry had posed in her Anya Phillips dress on the bumper of, say, a Ford LTD instead of the iconic '76 Fury on the cover of Plastic Letters? I've got this album cover hanging on my garage wall, right next to Sir Mix-a-Lot's My Hooptie and its '69 Buick Electra. This sun-baked '75 left the assembly line with some nice luxury options for an affordable midsize sedan of its time, including a padded vinyl roof. Factory air conditioning was a $437 option on the Fury in 1975, a price tag that comes to an attention-grabbing $2,185 in 2020 dollars. The MSRP on a Fury sedan that year started at just $3,571 ($17,840 today), so A/C jacked up the cost by close to 15%. The base engine was a 225-cubic-inch (3.7-liter) Slant-6, but this car took the next step up on the Fury engine hierarchy for 1975: a 318-cubic-inch (5.2-liter) V8 making 145 horsepower. Here's where things get a bit weird. That shift lever on the steering column controls a three-speed manual; this rig is commonly known as a three-on-the-tree. The most popular transmission setup on Detroit cars of the 1940s through the early 1960s, the good ol' three-on-the-tree survived here all the way through the 1979 model year in new cars and 1987 in new trucks. By 1975, most lower-priced American mid- and full-sized cars had the three-on-the-tree as base equipment, but by that time nearly every new-car shopper here opted for an automatic transmission or — occasionally — a floor-shifted three- or four-speed manual. The total number of 1975 Fury buyers who sprang for the V8 engine, air conditioning, and a vinyl roof yet still kept the old-fashioned three-on-the-tree transmission setup probably can be counted in the low hundreds, if even that many.