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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.

2018 Jeep Wrangler Rubicon Alaska Cannonball | 14,000 miles to Deadhorse and back

I've never delayed big adventure long enough to fill a bucket. But I do have a bucket item that dates to 1992: drive from Deadhorse, Alaska, to Tierra del Fuego, Argentina. Twenty-six years later, it's time. But first, I needed a vehicle. And a Jeep Wrangler was not my first choice. Growing up as a kid in the Midwest, I loved Jeeps. But around 10 years ago I went on a camping trip to Death Valley with a colleague, testing the early JK Wrangler against the competition. By the end of it, I couldn't justify the ergonomic and physical punishment for the admittedly massive capability. So two years ago, I bought a 1994 Toyota Land Cruiser project truck to make the journey. I paid too much, and the Cruiser revealed itself to be not a garage project, but the Manhattan Project. I took this as a good omen. Adventure begins in the deep end, so why wait to get there? During a break from discovering enough gremlins to reboot the movie franchise, I had dinner with Jeep's West Coast PR guy. I mentioned my plans for a six-month overlanding trek to Alaska. He said, "You know, we've got a new Wrangler coming out — that might be a good test of the chassis." My outside voice said, "That would be interesting." My inside voice said, "Hmmm." Anything's possible after 10 years, right? I might like it. Might. Many plans have gone awry on the way to this moment. It's taken more than a year to lock in a start date, because Jeep couldn't spare a Wrangler Rubicon. Everyone else in America keeps buying them. A suitable Wrangler was found eventually, but now the deed had to be done in three months, not six. What was going to be a comfortably-paced, backwoods roll up to Alaska and back has turned into the Rubicon Overland Cannonball. I know 14 weeks is plenty of time to drive to the Arctic and back. (Tierra del Fuego is officially off the itinerary.) However, the point of this trip is to fit in as much dirt, as many bucket-list trails, and all the wild America possible. That means my route's about 14,000 convoluted miles of criss-crossing the country in all the cardinal directions. And that's assuming everything goes to plan. Until last week, I was doing this trip with a friend from college who lives in Marietta, Georgia. He was the photo/video guy. Then he had a medical emergency, so the only trip he's taking is to the OR and rehab. Now I'm going by myself, and I think it's important to point out that I have no idea what I'm doing. That isn't modesty, that's truth: zero clue.

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.