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Auto Mergers and Acquisitions: Suicide or salvation?

We love the Moses figure. A savior riding in from stage right with the ideas, the smarts, and the scrappiness to put things right. Alan Mullaly. Carroll Shelby. Lee Iacocca. Andrew Carnegie. Steve Jobs. Elon Musk. Bart Simpson. Sergio Marchionne does not likely view himself with Moses-like optics, but the CEO of Fiat Chrysler Automobiles recently gave a remarkable, perhaps prophetic interview with Automotive News about his interest and the inevitability of merging with a potential automotive partner like General Motors. Marchionne has been overtly public about his notion that GM must merge with FCA. For a bit of context, GM sold 9.9 million vehicles in 2014, posting $2.8 billion in net income, while FCA sold 4.75 million units and earned $2.4 billion in net income, painting a very rosy FCA earnings-to-sales picture. But that's not the entire picture. Most people in the auto industry still remember the trainwreck that was the DaimlerChrysler "merger" written in what turned out to be sand in 1998. It proved to be a master class in how not to fuse two companies, two cultures, two continents, and two management teams. Oh, it worked for the two individuals at both helms pre-merger. They got silly rich. And the industry itself was in a misty romance at the time with mergers and acquisitions. BMW bought Rolls-Royce. Volkswagen Group bought Bentley, Bugatti, and Lamborghini, putting all three brands into their rightful place in both products and positioning. No marriages there, so no false pretense. Finally, Nissan and Renault got married in 1999. A successful marriage requires several rare elements in this atmosphere of gas fumes and power lust. But a successful marriage requires several rare elements in this atmosphere of gas fumes and power lust, the principle part being honesty. Daimler and Chrysler lied to each other. The heads of each unit, the product planners, and finance all presented their then-current and long-range forecasts to each other with less-than-forthright accuracy. Daimler was the far greater equal and no one from the Chrysler side enjoyed that. The cultures were entirely different, too, and little was done to bridge that gap. Which brings me back to the present overtures by Marchionne to GM. "There are varying degrees of hugs," Marchionne stated in the Automotive News piece. "I can hug you nicely, I can hug you tightly, I can hug you like a bear, I can really hug you." Seriously?

FCA cuts powertrain warranties to 60k miles

FCA US is cutting back the mileage of its powertrain warranty on some 2016 model year vehicles. Rather than the current five years/100,000 miles of coverage, the new amount is five years/60,000 miles for gasoline-fueled models from Chrysler, Jeep, Dodge and Ram. In March 2015, General Motors made a similar switch to five-years/60,000-miles of coverage for Chevrolet and GMC, and FCA US seems to be citing this as part of the reason for the shift. "Following changes already made by competitors, FCA US is adjusting powertrain warranty coverage for 2016 model year vehicles to be more consistent with industry practices," the automaker said in a portion of its statement. The bumper-to-bumper warranty for these vehicles is unchanged at three years/36,000 miles. According to Automotive News, Fiat's warranty is remaining at four years/50,000 miles. When it changed the mileage limit, GM also halved the number of free service visits for Chevy, GMC, and Buick to two from the previous four. The automaker claimed that the reason for the adjustments to its coverage was that a long warranty was seldom a reason for customers to buy a vehicle. Related Video: Response to Query: 2016MY Powertrain Warranty Adjustment Following changes already made by competitors, FCA US is adjusting powertrain warranty coverage for 2016 model year vehicles to be more consistent with industry practices. For 2016MY, Chrysler, Jeep®, Dodge and Ram Truck vehicles with gasoline engines will be covered by a 5 year/60,000 mile powertrain warranty. The basic coverage, also known as "bumper to bumper," remains at 3 years/36,000 miles. # # # News Source: FCA US, Automotive News - sub. req.Image Credit: Mark Ralston / AFP / Getty Images Chrysler Dodge Jeep RAM Car Buying Maintenance Ownership FCA warranty fca us powertrain

Barracuda's Dodge branding no biggie, but what about engines?

Rumors about a revival of the Barracuda nameplate have been circulating for years now, though which brand it might fall under has been a bit of a mystery. Initial speculation had the car labeled an SRT product, but that acronym has since returned to its former role as a sub-brand for top-performance Mopars. Thanks to leaks from a recent FCA dealership event, we know the Barracuda is back on the table but will be sold under the Dodge umbrella, a move that has been generating a bit of ire from Pentastar fanatics, as the car was originally part of the defunct Plymouth brand. Given what's known about the new model, however, the badge is the least of my concerns about the new car. Let's start with the re-branding itself. This isn't the first time Chrysler has shuffled models around to different brands. The current-generation Viper spent two years as the flagship model under the SRT banner, only to return to Dodge for 2015 when SRT resumed its former role as a sub-brand. Years ago, the Neon was sold as a Plymouth, a Dodge, and a Chrysler model, depending on where you shopped for one. When Plymouth ceased to exist, the last few years of Prowler production got Chrysler badges instead. Then there's the new Jeep Renegade, a model whose name was born out of a trim level. The Barracuda might not turn out to be a muscle car in the way we currently define them. Further examples of naming liberties taken throughout automotive history could fill a book, but suffice it to say that these days a model's name has very little to do with the vehicle itself or any legacy it might have. The Barracuda name might be a particularly sacred cow with enthusiasts, but to me, a much bigger concern is the fact that the car might not turn out to be a muscle car in the way we currently define them. News from the Fiat Chrysler dealer briefing earlier this week indicates that when the next Charger debuts it will share its platform with the Barracuda, much the way the Charger and Challenger are twinned now. One difference is that the Barracuda is tipped to be offered as a convertible, while the modern Challenger is tintop-only. The Charger and Barracuda will use the rear-drive platform developed for Alfa Romeo's new Giulia, itself designed as a BMW M3 fighter both from a dimensional and dynamic standpoint; the Barracuda is expected to be slightly smaller than the current Challenger.