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Fiat Chrysler profit up as it closes in on retiring its debt

MILAN — Fiat Chrysler Automobiles reduced its debt by more than expected in the first quarter, putting the carmaker well on course to become cash positive later this year. Chief Executive Sergio Marchionne expects to cancel all debt during 2018 — possibly by the end of June — and generate around 4 billion euros ($5 billion) in net cash by the end of the year. Marchionne has said that forecast does not include any one-off measures, nor the impact of the planned spinoff of parts maker Magneti Marelli, which he hopes to execute by early 2019. The world's seventh-largest carmaker said on Thursday net debt had fallen to 1.3 billion euros ($1.6 billion) by the end of March, well below a consensus forecast of 2.6 billion euros in a Thomson Reuters poll of analysts. FCA said capital spending fell 900 million euros in the quarter due to "program timing," which analysts said implied higher investments for the rest of the year. The Italian-American group said first-quarter operating profit rose 5 percent to 1.61 billion euros, below a consensus forecast of 1.74 billion, as a weaker performance from its North American profit center weighed. Shipments there were higher due to the new Jeep Wrangler and Compass models. But currency moves hit revenues and earnings, and costs related to new product launches added to the pressure. FCA's shift to sell more trucks and SUVs boosted margins yet again in North America to 7.4 percent from 7.3 percent in the same quarter a year ago, although they were down from the 8 percent recorded in the preceding three months. Marchionne, preparing to hand over to an internal successor next year, is close to his goal of ending a margin gap with larger U.S. rivals General Motors and Ford. The 65-year-old has said becoming debt free and being able to compete on a par with U.S. peers would mean FCA no longer needed a partner to survive and could well succeed on its own. The CEO has previously said tying up with another carmaker would help to meet the huge costs in an industry investing in electric vehicles and automated driving. FCA shares fell immediately after the results, but recovered to trade up 3 percent at 19.71 euros by 1150 GMT, outperforming a 0.4 percent rise in Europe's blue-chip stock index. ($1 = 0.8214 euros) Reporting by Agnieszka FlakRelated Video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.

Fiat Chrysler recalls 4.8 million U.S. vehicles for cruise control defect

WASHINGTON - Fiat Chrysler said on Friday it is recalling 4.8 million U.S. vehicles over a defect that could prevent drivers from deactivating cruise control and warned owners not to use the function until they get software upgrades. The Italian-American automaker said no injuries or crashes are related to the large recall campaign but said it had one report of a driver of a 2017 Dodge Journey rental car unable to deactivate the cruise control. Fiat Chrysler, which in 2015 was hit with penalties from U.S. regulators totaling $175 million for safety lapses, did not say how much the recalls would cost. The recall addresses what Fiat Chrysler called an "extremely rare" series of events that could lead to drivers being unable to cancel cruise control. The National Highway Traffic Safety Administration (NHTSA) said on Friday it "strongly encourages vehicle owners to follow a warning" to stop using cruise control on the recalled vehicles until repaired. NHTSA said drivers could overpower the system by forcefully applying the brakes until the vehicle stopped. Fiat Chrysler also said the vehicle could be stopped by shifting into neutral and braking. Fiat Chrysler shares fell more than 2 percent in premarket trading in New York on the recall. Fiat Chrysler noted that at times cruise control systems automatically initiate acceleration to help vehicles maintain driver-selected speeds, including when going up an incline. If an acceleration occurs simultaneously with a short-circuit in a specific electrical network, a driver could be unable to deactivate the function. Fiat Chrysler said vehicles may be placed in park once stopped, at which point cruise-control is canceled. The recall involves a group of gasoline-powered vehicles with automatic transmissions from various model years built from 2014 through the 2019 model year. Most of the vehicles being recalled cover the 2014-2018 model years. Among the vehicles being recalled are the Chrysler 200, Chrysler 300, Chrysler Pacifica, Dodge Charger, Dodge Challenger, Dodge Journey, Dodge Durango, Jeep Cherokee, Jeep Grand Cherokee, Jeep Wrangler and Ram 1500, 2500 and 3500 pickup trucks and Ram 3500/4500/5500 cab chassis trucks. Fiat Chrysler made the announcement going into the busy Memorial Day weekend, which traditionally kicks off the summer driving season.

Dodge Demon makes so much torque, it needs stronger driveline parts

Torque is a lovely thing, a sweet and wonderful force that twists and pulls and can help propel a two-ton metal box forward at comical speeds. Torque is also fickle and will bend and break those same metal parts without a second thought, which is why the new Dodge Demon is compensating for its increased torque with some new re-engineered and reinforced parts. And there's software intended to combat wheel hop, which one of the most dramatic ways torque can break stuff. Week 8's video, "Race-hardened Parts," gives a hint towards what all these new parts can do. While we still don't know how much torque the Demon will throw out, we do know it's enough to warrant an upgraded prop shaft, half shafts, and a differential housing. The Challenger Hellcat, which is the basis for the Demon, makes 650 pound-feet of torque already. The new parts will go a long way toward making sure the work from the Demon's engine is properly translated into motion by those Nitto drag radials. The new prop shaft uses high-strength steel, heat-treated stub-shafts, and increases the tube thickness by 20 percent for a 15 percent increase in torque capacity. Additionally, Dodge says the upgraded differential housing allows for a 30 percent increase in torque capacity by using heat-treated A383 aluminum alloy and a higher strength shot-peened gear set. The 41-spline half shafts that deliver 20 percent increased torque capacity through the use of high-strength low alloy steel and 8-ball joints. In addition to the hardware, the Launch Assist software has been tuned to help alleviate wheel hop. Dodge says the Demon is the first factory production car that uses wheel speed sensors to detect hop and momentarily cut torque to compensate. This means a driver can keep their foot planted on the floor while the computer sorts out the traction. Previously, the best solution was to back off the throttle to manually cut the load. Finally, the Dodge Demon will offer a four-point harness mounting bar as an optional accessory. The part will be supplied by Speedlogix and fits in place of the deleted rear seat. Customers can install the bar without having to hack apart their cars to find a proper mounting point. Look for more teasers and info on ifyouknowyouknow.com in the lead-up to the Demon's debut at the 2017 New York Auto Show. Related Video: Image Credit: FCA Dodge Performance dodge demon dodge hellcat