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NHTSA investigating Harman Kardon for software vulnerabilities

The National Highway Traffic Safety Administration is investigating infotainment units from Harman Kardon, which produces FCA's Uconnect, to determine if Harman Kardon systems used by other companies are also vulnerable to hackings. Researchers discovered a hole in the cellular connection to the Uconnect infotainment in a Jeep Cherokee. They were able to exploit it to gain access to the vehicle's brakes, radio, and other systems. In the wake of the hack, FCA pledged to send out 1.4 million USB drives to update the software. Politicians also attacked the automaker for not reporting the problem sooner, and NHTSA opened an investigation to find whether the fix worked. INVESTIGATION Subject : Software security vulnerability Date Investigation Opened: JUL 29, 2015 Date Investigation Closed: Open NHTSA Action Number: EQ15005 Component(s): EQUIPMENT All Products Associated with this Investigation Equipment Brand Name Part No. or Model No.Production Dates HARMAN KARDON R3R4 - Details Manufacturer: HARMAN INTERNATIONAL SUMMARY: On July 23, 2015, Fiat Chrysler Automobiles (FCA) submitted a safety recall report to NHTSA concerning a software security defect condition in approximately 1.4 million model year (MY) 2013 through 2015 vehicles equipped with Uconnect 8.4A (RA3) and 8.4AN (RA4) radios manufactured by Harman Kardon (Recall 15V-461). According to FCA, software security vulnerabilities in the recalled vehicles could allow unauthorized third-party access to, and manipulation of, networked vehicle control systems. Unauthorized access or manipulation of the vehicle control systems could reduce the driver?s control of the vehicle increasing the risk of a crash with an attendant increased risk of injury to the driver, other vehicle occupants, and other vehicles and their occupants within proximity to the affected vehicle. This EQ is being opened to obtain information from the supplier of Chrysler Uconnect units to determine the nature and extent of similarities in other infotainment products provided to other vehicle manufacturers. If sufficient similarities exist, the investigation will examine if there is cause for concern that security issues exist in other Harman Kardon products. Related Video:

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.

FCA profits surge in second quarter

Fiat Chrysler Automobiles gave the cash register a beating in the second quarter, improving its net profit to 333 million euros ($364M US), which is a 263-percent jump over its reported Q1 profit of 92 million euros ($108M US). At the same time, FCA improved its global profit margin to 7.7 percent. Compared year-over-year, in Q2 2014 FCA reported net profit of 197 million euros making this year's Q2 a 69-percent increase, and profit margins a year ago were 4.9 percent. The two big factors for this increase are strong NAFTA sales and Jeep. In the US alone, Jeep sold 222,940 units in Q2 this year, a jump of almost 20 percent over the same period last year. Revenue in the NAFTA region totaled $18.8 billion, adjusted earnings before interest and taxes were $1.45 billion, both of those numbers more than doubling compared to 2014. The vastly better numbers come on marginally more global sales, 1,181,000 units sold in Q2 2014, 1,193,000 units sold in the same span this year. In the US, FCA began charging dealers one-percent more for vehicles to up the margins, a move that helped boost its US margin from 4.1 percent a year ago to 5.8 percent the first half of this year. The company is holding steady on its guidance of global deliveries at 4.8 million and its net profit guidance at $1.1 to $1.3 billion. It has increased its adjusted outlook for the year to $120.5 billion in revenue, and EBIT to "over $4.93 billion." News Source: Automotive News - sub. req.Image Credit: AP Photo/Carlos Osorio Earnings/Financials Chrysler Fiat Jeep FCA

Fiat Chrysler exec talks up the future of fuel cells

When it comes to a belief in the viability of electric vehicles, you can put automotive folks like Nissan's Carlos Ghosn and Tesla Motors' Elon Musk on one side of the proverbial wall and Fiat Chrysler Chief Technology Officer Harald Wester on the other. Because while the two former executives are staking much of their companies' respective future on plug-in electric drivetrain technology, Wester sees no such future in it at all, according to an interview in Motor Trend. Oh, sure, the Fiat Chrysler technology chief does give the idea of an electrified powertrain some quarter, saying he sees standard hybrids as a solution for the "intermediate" future in addressing both higher gas prices and need to meet progressively more stringent European greenhouse gas-emissions standards. But Wester, who also oversees Fiat Chrysler's Alfa Romeo and Maserati brands, ultimately views hydrogen fuel-cell technology as the way to go for advanced powertrains and minimal emissions. As for battery-electric vehicles? Wester pretty much shoots them, citing everything from a typical EV battery's weight to the challenge of finding electric recharging stations to the fact that much of the electricity needed for those cars is produced via CO2-emitting sources. He forgot to say anything about the CO2 required to bring gasoline or hydrogen to market. Wester's "bah humbug" is actually pretty consistent with the company's party line. Last year, Fiat Chrysler head honcho Sergio Marchionne, in an interview, famously told the general public not to buy the Fiat 500e electric vehicle. That's because he estimated that the company takes a $14,000 loss on each unit sold of Fiat Chrysler's only production EV. News Source: Motor Trend via Green Car Reports Green Chrysler Fiat Electric Hydrogen Cars harald wester

UAW may be key to forced FCA merger with GM

Sergio Marchionne doesn't give up on a business deal easily. While outwardly not much has recently been said about FCA's attempted merger with General Motors, Marchionne might be hoping to garner a powerful, new ally that could help break things wide open. The United Auto Workers retiree health care trust is the single largest shareholder of GM with 8.7 percent of the stock, and having its support would certainly improve FCA's position in getting a deal done. "Whatever happens in terms of consolidation, it would never be done without the consent and support of the UAW," Marchionne said when FCA recently began contract talks with the UAW, The Detroit News reports. The boss is also allegedly on good terms with the union president Dennis Williams. Still, using the organization for a hostile takeover could be very difficult because of the way its votes are structured. Other activist investors might already be on board, though. Marchionne believes that consolidation in the industry is vital because automakers are investing to create the same technologies. A GM/FCA merger still has many roadblocks, though, including the fact that Marchionne's company is smaller than GM. From a regulatory perspective, the size of the merged company could raise serious anti-trust concerns among regulators, according to The Detroit News. There's also the concern for lost jobs from redundant work with the two combined businesses. Even if the UAW angle doesn't work out, there are contingency plans afoot for other merger targets. According to The Detroit News speaking to anonymous insiders, FCA bigwigs have a meeting in London on Thursday to take a close look at other options. In addition to GM, they are investigating possible deals with Volkswagen and the Renault-Nissan Alliance. In the past, PSA Peugeot Citroen and multiple Asian automakers have also been brought up as partners, and UBS has reportedly been providing financial advice on what to do.

Certain Chrysler owners eligible for buyback program

Certain car owners whose Chrysler vehicles contain dangerous defects will soon have a way to get rid of their lemons without losing money. As part of an agreement with federal regulators, Fiat Chrysler Automobiles has agreed to buy back more than 500,000 vehicles susceptible to veering out of control without warning at above market-value prices. The deal mainly covers certain models of RAM trucks, the Dodge Dakota pickup and Dodge Durango SUV. Further, owners of more than 1.5 million Jeep Liberty and Grand Cherokees at heightened risk for lethal fires are eligible to trade in their vehicles at above market value or, alternately, get a gift certificate if they prefer to have repairs made. Chrysler has "a heavy responsibility to make sure the products they make are safe for the traveling public," said Mark Rosekind, administrator of the National Highway Traffic Safety Administration. "... Here, we are sending an unambiguous signal to industry that if you skirt the laws or violate the law, or don't live up to the responsibility that consumers expect, we are going to penalize you." The buy-back and trade-in options for motorists come as part of an unprecedented penalty NHTSA slapped against Chrysler for violating federal motor-vehicle safety laws. Chrysler will pay a $105 million fine, the highest ever levied by the regulatory agency. In addition to the buy-backs, Chrysler also agreed to an independent monitor for three years. Investigators had outlined problems in the company's conduct in 23 recalls that affected more than 11 million defect vehicles. As part of a consent-order agreement, Chrysler acknowledged it did not notify vehicle owners of recalls in an effective manner and did not notify NHTSA of safety problems. Though those recalls affected millions of drivers, the buy-back and trade-in options are only for a small portion of the vehicles involved. Because Chrysler struggled to fix the problem and no repair was apparent, Rosekind said the buy-backs are reserved "for customers who didn't have a remedy." Buy-backs are for trucks and SUVs affected by three recalls that occurred in 2013 (recalls 13V-038, 13V-527 and 13V-529), that addressed a rear-axle pinion nut that could come loose and cause a loss of vehicle control. Those recalls covered 579,228 vehicles, including 2009-2012 Ram 1500, 2500, 3500, 4500 and 5500 trucks, 2009-2012 Dodge Dakotas, 2009 Chrysler Aspen and the 2009 Dodge Durango.

Fiat Chrysler to get $105M fine from NHTSA for recall woes

The National Highway Traffic Safety Administration is about to send a powerful message to automakers doing business in the United States, assuming reports of an upcoming $105 million fine against Fiat Chrysler Automobiles comes to fruition. In addition to the record-setting monetary fine, according to The Wall Street Journal, FCA will have to accept an independent auditor that will monitor the company's recall and safety processes and will be forced to buy back certain recalled vehicles. In other cases, such as with Jeep Grand Cherokee and Liberty models with gas tanks that could potentially catch fire in certain types of accidents, FCA will offer financial encouragement for owners to get their recall work done or to trade those older vehicles in on new cars, according to the report. FCA could reportedly reduce its fines if it meets certain conditions, though those remain unclear at this time. These actions against FCA are being taken after NHTSA began a probe into the automaker over almost two dozen separate instances where the government claims FCA failed to follow proper procedures for recalls and safety defects. Included in those safety lapses are more than 11 million vehicles currently in customer hands. These penalties and fines are separate from the investigation over security problems with Chrysler's Uconnect system that allowed hackers to obtain remote access into key vehicle systems in 1.4 million vehicles. Related Video: Image Credit: Marco Bertorello/AFP/Getty Earnings/Financials Government/Legal Recalls Chrysler Dodge Fiat Jeep RAM Safety fiat chrysler automobiles fine

Ferrari officially files SEC paperwork to register future IPO

Late last year FCA announced plans to spin off Ferrari into a separate company, and after a long wait that process has finally become official. The Prancing Horse has now filed the necessary prospectus and other documents with the Securities and Exchange Commission to hold an initial public offering on The New York Stock Exchange. The paperwork doesn't mention a specific date for the Italian sportscar maker's IPO, but it's expected sometime in October. At this point, the documents also don't include some other vital data about the IPO. Ferrari lists neither the number of shares being offered nor their price. The company also doesn't have a stock symbol yet. UBS, BofA Merrill Lynch and Santander are acting as joint book runners for the deal. As part of the IPO, FCA initially intends to sell 10 percent of Ferrari's shares on the stock market. Another 10 percent of the company still belongs to Piero Ferrari. FCA is holding onto the remaining 80 percent in the short term for financial reasons but intends to distribute them to shareholders in early 2016. After the spin-off, about 24 percent of Ferrari would be owned by Exor, 10 percent by Piero Ferrari, and 66 percent by public shareholders, according to the SEC documents. FCA boss Sergio Marchionne believes that Ferrari could be worth over $11 billion. Although, his estimate might be slightly high. According to Reuters, Wall Street is actually putting the value somewhere between $5.5 billion and $11 billion. If you're thinking about investing in the company or just want to read the nitty-gritty about the brand's financial health, the entire SEC filing can be read here. Ferrari Files for Initial Public Offering LONDON, July 23, 2015 /PRNewswire/ -- Fiat Chrysler Automobiles N.V. ("FCA") announced today that its subsidiary, New Business Netherlands N.V. (to be renamed Ferrari N.V.), has filed a registration statement on Form F-1 with the U.S. Securities and Exchange Commission ("SEC") for a proposed initial public offering of common shares currently held by FCA. The number of common shares to be offered and the price range for the proposed offering have not yet been determined, although the proposed offering is not expected to exceed 10% of the outstanding common shares. In connection with the initial public offering, Ferrari intends to apply to list its common shares on the New York Stock Exchange.

Dodge Journey and Fiat Freemont engine-cover recall affects 350k CUVs

FCA is recalling 349,731 examples of the 2011-2015 Dodge Journey and Fiat Freemont worldwide to better secure their engine covers. Of these affected vehicles, there are 144,416 in the US, 43,679 in Canada, 46,231 in Mexico, and 115,405 elsewhere. About 10 percent of them are also still at dealers, according to the automaker. Only models with the 2.4-liter four-cylinder engine are affected by this campaign. According to the company, the engine covers on these vehicles can be dislodged, and this can pose a fire risk if the loose part comes in contact with hot exhaust components. Warning signs of this happening include a noise under the hood, burning smell or a light on the instrument panel. The problem was discovered after three incidents on rough roads in Chile, and there was one minor injury there. According to FCA US spokesperson Eric Mayne to Autoblog, there have been eight occurrences of this issue reported in the US, but these were all related to "heat damage." There have been no reported injuries here. To fix the problem, dealers will install new engine-cover retainers on the affected models. These repairs will begin in August. As always for recall repairs, owners won't be charged. Statement: Engine Cover July 22, 2015 , Auburn Hills, Mich. - FCA US LLC is voluntarily recalling an estimated 144,416 crossover utility vehicles (CUVs) in the U.S. to better secure their engine covers. Engine covers in certain vehicles may become dislodged. If they come in contact with exhaust components, it may pose a fire risk. This condition was discovered during an FCA US investigation of three incidents in Chile. In each case, the vehicle had been driven extensively on unpaved or uneven surfaces. The Company is aware of a single related injury, described as minor. Affected are 2011-2015 Dodge Journey and Fiat Freemont CUVs equipped with 2.4-liter, four-cylinder engines. FCA US will install upgraded engine-cover retainers in these vehicles. The remedy will be available when customer notification begins next month; service will be performed free of charge. Vehicles equipped with six-cylinder engines are not affected. Additional Journey and Freemont populations also are subject to this campaign. They comprise an estimated 43,679 vehicles in Canada; 46,231 in Mexico; and 115,405 outside the NAFTA region. Of the 349,731 total vehicles subject to this campaign, approximately 10 percent remain in dealer hands.

Porsche, Jaguar continue dominance in 2015 JD Power APEAL study

The top of JD Power's 2015 APEAL Study has not changed much in the last year. Porsche remains No. 1 with Jaguar nipping at its heels, although both premium brands saw their overall score fall compared to 2014. For those that need a refresher, the APEAL Study looks at how "gratifying" a vehicle is to own and drive, rating cars and brands on a 1,000-point scale. The industry average for 2015 has increased from 794 to 798, while the total number of automakers that finished above the curve increased from 16 to 20. While Porsche and Jaguar finished at the top, their scores dropped eight and seven points, respectively, to 874 and 855. The top "non-premium" brand was Mini, which scored an impressive 825, up from 795. If the BMW-owned British marque is still a bit too premium for your tastes, last year's non-premium winner, Hyundai, did climb five points and is this year's runner up. At the opposite end of the scale, Smart sits at the very bottom of the rankings, with a score of 683 (it didn't appear on the 2014 rankings). Fiat also dropped, from fourth worst in 2014 to second worst in 2015, despite the 500 being named most appealing city car. Subaru made an impressive climb, from third worst to seventh, falling just 10 points shy of the industry average and two points south of the non-premium average. In the individual vehicle segments, eight brands earned multiple awards, with Ford, Chevrolet, and Porsche earning three apiece. Surprise segment victories included the new Ford Expedition, which beat out Chevy's popular Suburban. The Infiniti QX80 bested the likes of the Cadillac Escalade and Range Rover for best large luxury SUV, and the Dodge Challenger beat its muscle car rivals from Ford and Chevy. Most of the victories, though, were quite predictable. The Mazda6 and CX-5 took wins for the midsize sedan and compact SUV categories respectively, while the Volkswagen Golf captured the compact car win. The Ford F-150 won the large pickup category, while the Porsche Cayman was named most appealing compact premium sporty car. Check out the official release on the 2015 APEAL Study, available below, from JD Power. 2015 U.S. APEAL Study Results The latest safety-related technologies are among the drivers of customer satisfaction with new vehicles, according to the J.D. Power 2015 U.S.