2013 Fiat 500 Pop on 2040-cars

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China-FCA merger could be a win-win for everyone but politicians

NEW YORK — Fiat Chrysler boss Sergio Marchionne has said the car industry needs to come together, cut costs and stop incinerating capital. So far, his words have mostly fallen on deaf ears among competitors in Europe and North America. But it appears Marchionne has finally found a receptive audience — in China. FCA shares soared Monday after trade publication Automotive News reported the $18 billion Italian-American conglomerate controlled by the Agnelli family rebuffed a takeover from an unidentified carmaker from the Chinese mainland. As ugly as the politics of such a combination may appear at first blush, a transaction could stack up industrially, and perhaps even financially. A Sino-U.S.-European merger would create the first truly global auto group. That could push consolidation to the next level elsewhere. Moreover, China is the world's top market for the SUVs that Jeep effectively invented, so it might benefit FCA financially. A combo would certainly help upgrade the domestic manufacturer; Chinese carmakers have gotten better at making cars, but struggle to build global brands, and they need to develop export markets. Though frivolous overseas shopping excursions by Chinese enterprises are being reined in by Beijing, acquisitions that support the modernization and transformation of strategic industries still receive support, and the government considers the automotive industry to be strategic. A purchase of FCA by Guangzhou Automobile, Great Wall or Dongfeng Motors would probably get the same stamp of approval ChemChina was given for its $43 billion takeover of Syngenta. What's standing in the way? Apart from price (Automotive News said FCA's board deemed the offer insufficient) there's the not-insignificant matter of politics. Even as FCA shares soared, President Donald Trump interrupted his vacation to instruct the U.S. Trade Representative to look into whether to investigate China's trade policies on intellectual property. Seeing storied Detroit brands like Jeep, Chrysler, Ram and Dodge handed off to a Chinese company would provoke howls among Trump's economic-nationalist supporters. It might not play well in Italy, either, to see Alfa Romeo and Maserati answering to Wuhan instead of Turin — though Automotive News said they might be spun off separately. Yet, as Morgan Stanley observes, "cars don't ship across oceans easily," and political considerations increasingly demand local manufacture of valuable products.

5,600 Fiat 500e EVs recalled for buggy software

Fiat will be recalling some 5,600 of its all-electric 500e hatchbacks, all of which hail from model years 2013, 2014 and 2015. Weirdly, this recall is being caused by a March 2015 software update. According to The Detroit News, last month's update addressed the software in the Electric Vehicle Control Unit and Battery Pack Control Module "to implement improvements in charging system robustness, diagnostic capability and range estimation over life. In addition to the primary reasons for the software update, Limp Home Mode was included as part of battery pack software continuous improvement," FCA explained. "It was because of this software update that the software incompatibility occurred where the EVCU did not recognize the Limp Home Mode." Should your car go into limp mode, "incompatible software between Electric Vehicle Control Unit (EVCU) and Battery Pack Control Module (BPCM) may cause the electric propulsion system to fully shut down," according to the National Highway Traffic Safety Administration bulletin. So yes, the March software update can cause your EV to stall. Vehicles built between March 27, 2012 and November 1, 2014, which sounds like basically all 500es, are affected by the recall. Chrysler will begin notifying owners with recall operations to begin in the middle of next month. Scroll down for the official NHTSA bulletin. Related Video: Report Receipt Date: MAR 27, 2015 NHTSA Campaign Number: 15V179000 Component(s): ELECTRICAL SYSTEM Manufacturer: Chrysler (FCA US LLC) SUMMARY: Chrysler (FCA US LLC) is recalling certain model year 2013-2015 Fiat 500 EV vehicles manufactured March 27, 2012, to November 1, 2014. If the vehicle goes in to limp home mode, incompatible software between Electric Vehicle Control Unit (EVCU) and Battery Pack Control Module (BPCM) may cause the electric propulsion system to fully shut down. CONSEQUENCE: An electric propulsion system shut down will cause a stall-like condition, increasing the risk of a crash. REMEDY: Chrysler will notify owners, and dealers will update the vehicle software to ensure compatability between components, free of charge. The recall is expected to begin May 15, 2015. Owners may contact Chrysler customer service at 1-800-853-1403. Chrysler's number for this recall is R15. NOTES: Owners may also contact the National Highway Traffic Safety Administration Vehicle Safety Hotline at 1-888-327-4236 (TTY 1-800-424-9153), or go to www.safercar.gov.

Weekly Recap: Marchionne's Manifesto again calls for industry consolidation

Sergio Marchionne isn't taking no for an answer. Despite public rebuffs from General Motors and Ford, the leader of Fiat Chrysler Automobiles continues to push for consolidation within the auto industry. His latest assertion came Wednesday when he said a combination of FCA with another automaker could net savings of $5 billion or more annually. No, this isn't about selling his company, he claimed, it's about cutting costs. Put simply, the auto industry wastes money, Marchionne said during FCA's earnings conference call. Companies invest billions to develop basic components that all cars use, but many consumers don't care how they work or recognize the differences. "About half of this is really relevant in terms of positioning the car in the marketplace," he said. "The other half, in our view, is stuff which is neither visible to the consumer nor is it relevant to the consumer." In 2014, top automakers spent more than $100 million on product development, FCA estimated. Marchionne said consolidation could save up to $1 billion on powertrains alone, noting that almost every automaker offers four- and six-cylinder engines. Not everyone has to make their own, he contended. "The consumer could not give a flying leap whose engines we are using because they are irrelevant to the buying decision." That's pretty provocative for enthusiasts, but less so for average consumers. Still, there are major differences in power and efficiency ratings, even among similar engines. Skeptics could argue consolidation would also weaken competition and reduce choices for car buyers. Marchionne stressed his presentation, curiously entitled Confessions of a Capital Junkie, wouldn't require closing factories or dealerships. It's not his final "big deal" as CEO, intent to sell FCA, or a way to elevate his company up the automotive food chain. He claims he wants to fundamentally change the industry and its habit for burning cash. "The horrible part about this, and the thing that I find most offensive, is that the capital consumption rate is duplicative," he said. "It doesn't deliver real value to the consumer and it is in its purest form, economic waste." Other News & Notes Ford Profits dip in first quarter Ford profits fell $65 million to $924 million in the first quarter, hampered by slight dips in revenue and sales.