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The problem with how automakers confront hacking threats

More than anyone, Chris Valasek and Charlie Miller are responsible for alerting Americans to the hacking perils awaiting them in their modern-day cars. In 2013, the pair of cyber-security researchers followed in the footsteps of academics at the University of Cal-San Diego and University of Washington, demonstrating it was possible to hack and control cars. Last summer, their research established which vehicles contained inherent security weaknesses. In recent weeks, their latest findings have underscored the far-reaching danger of automotive security breaches. From the comfort of his Pittsburgh home, Valasek exploited a flaw in the cellular connection of a Jeep Cherokee and commandeered control as Miller drove along a St. Louis highway. Remote access. No prior tampering with the vehicle. An industry's nightmare. As a result of their work, FCA US recalled 1.4 million cars, improving safety for millions of motorists. For now, Valasek and Miller are at the forefront of their profession. In a few months, they could be out of jobs. Rather than embrace the skills of software and security experts in confronting the unforeseen downside of connectivity in cars, automakers have been doing their best to stifle independent cyber-security research. Lost in the analysis of the Jeep Cherokee vulnerabilities is the possibility this could be the last study of its kind. In September or October, the U.S. Copyright Office will issue a key ruling that could prevent third-party researchers like Valasek and Miller from accessing the components they need to conduct experiments on vehicles. Researchers have asked for an exemption in the Digital Millennial Copyright Act that would preserve their right to analyze cars, but automakers have opposed that exemption, claiming the software that runs almost every conceivable vehicle function is proprietary. Further, their attorneys have argued the complexity of the software has evolved to a point where safety and security risks arise when third parties start monkeying with the code. Their message on cyber security is, as it has been for years, that they know their products better than anyone else and that it's dangerous for others to meddle with them. But in precise terms, the Jeep Cherokee problems show this is not the case. Valasek and Miller discovered the problem, a security hole in the Sprint cellular connection to the UConnect infotainment system, not industry insiders.

The Chrysler brand could be axed under Stellantis management

MILAN — While running NissanÂ’s North American operations from 2009 to 2011, Carlos Tavares had a reputation for closely watching costs with little tolerance for vehicles or ventures that didnÂ’t make money. Experts say that means Tavares, currently the head of PSA Group, is likely to follow that blueprint when he becomes leader of a merged PSA and Fiat Chrysler Automobiles. The low-performing Chrysler brand might get the axe as could slow-selling cars, SUVs or trucks that lack potential. Already the companies are talking about consolidating vehicle platforms — the underpinnings and powertrains — to save billions in engineering and manufacturing costs. That could mean job losses in Italy, Germany and Michigan as PSA Peugeot technology is integrated into North American and Italian vehicles. “You canÂ’t be cost efficient if you keep the entire scale of both companies,” said Karl Brauer, executive analyst for the iSeeCars.com auto website. “WeÂ’ve seen this show before, and weÂ’re going to see it again where they economize these platforms across continents, across multiple markets.” Shareholders of both companies are to meet Monday to vote on the merger to form the worldÂ’s fourth-largest automaker, to be called Stellantis. The deal received EU regulatory approval just before Christmas. Tavares, who for years has wanted to sell PSA vehicles in the U.S., wonÂ’t take full control of the merged companies until the end of January at the earliest. He likely will target Europe for consolidation first, because thatÂ’s where Fiat vehicles overlap extensively with PSAÂ’s, said IHS Markit Principal Auto Analyst Stephanie Brinley. Europe has been a money-loser for FCA, and factories in Italy are operating way below capacity — a concern for unions, given FiatÂ’s role as the largest private sector employer in the country. “We are at a crossroads,Â’Â’ said Michele De Palma of the FIOM CGIL metalworkersÂ’ union. “Either there is a relaunch, or there is a slow agonizing closure of industry, in particular the auto industry, in Italy.” ItalyÂ’s hopes lie with the luxury Maserati and sporty Alfa Romeo brands, but De Palma said investments are needed to bring hybrid and electric technology up to speed. FiatÂ’s Italian capacity stands at 1.5 million vehicles, but only a few hundred thousand are being produced each year. Most factories were on rolling short-term layoffs due to lack of demand, even before the pandemic.

Weekly Recap: FCA hit with record fine as NHTSA crackdown continues

The National Highway Traffic Safety Administration slapped Fiat Chrysler Automobiles with a record fine this week that could reach $105 million. The punishment comes after NHTSA found problems with the automaker's execution of 23 recalls that affect more than 11 million vehicles. The consent agreement, announced Sunday, calls for FCA to pay a $70-million cash fine and requires the company to spend at least $20 million over a three-year period on industry outreach programs and to beef up old recall campaigns. Failure to comply will result in another $15-million fine. FCA also agreed to federal oversight, which includes an independent monitor to oversee the company's recalls. The $70-million cash fine equals a penalty NHTSA levied on Honda in January. "Fiat Chrysler's pattern of poor performance put millions of its customers and the driving public at risk," NHTSA administrator Mark Rosekind said in a statement. "This action will provide relief to owners of defective vehicles, will help improve recall performance throughout the auto industry, and gives Fiat Chrysler the opportunity to embrace a proactive safety culture." FCA called the deal a "consensual resolution," but admitted that it "failed to timely provide an effective remedy" during certain recalls. "We are intent on rebuilding our relationship with NHTSA and we embrace the role of public safety advocate," the company said in a statement. The announcement kicked off a busy week for the automaker. NHTSA agreed FCA did not need to recall 4.7 million vehicles after an investigation failed to find defects with a power module used in some Jeep, Dodge, and Ram vehicles. A Georgia judge also reduced a civil verdict involving a death in a Jeep Grand Cherokee crash. Amid all of that, the company reported net profit of about 333 million euros, or $364 million in the second quarter on Thursday. OTHER NEWS & NOTES FCA ramps up Hellcat production Despite a decidedly legal and financial week for FCA, there was still time for the performance side of the business to briefly grab the spotlight. The automaker is more than doubling its production of the Dodge Challenger and Charger SRT Hellcats in response to strong demand. The order bank opens the second week of August and production begins in September. FCA will finish up its scheduled 2015 model-year Hellcat builds, and cancel any "unscheduled" versions, though customers will get discounted pricing for 2016.