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Autoblog Minute: FCA hit with record fine, issues recall and buyback

FCA, found in violation of the Motor Vehicle Safety Act, agrees to buyback recalled models as part of record penalties issued by National Highway Traffic Safety Administration. The cars in question are more than half a million Chrysler vehicles with defective suspension parts that could cause cars to lose control, and more than a million Jeeps that are prone to deadly fires. Autoblog's Eddie Sabatini reports on this edition of Autoblog Minute, with expert commentary from Pete Bigelow. Show full video transcript text [00:00:00] FCA faces record penalties as the National Highway Traffic Safety Administration finds the automaker in violation of the Motor Vehicle Safety Act. I'm Eddie Sabatini and this is your Autoblog Minute. Penalties for the automaker include submitting to increased government oversight, a hundred and five million dollar civil penalty, as well as, mandates to buy back defective vehicles from owners and payment for repairs. The cars in question are [00:00:30] more than half a million Chrysler vehicles with defective suspension parts that could cause cars to lose control, and more than a million Jeeps that are prone to deadly fires. Autoblog's Pete Bigelow discussed the NHTSA findings with us. [00:01:00] [PETE BIGELOW INTERVIEW] This fine and buyback recall, combined with the 1.4 million vehicles recalled over remote hacking concerns makes for a rough couple of weeks for FCA. For Autoblog, I'm Eddie Sabatini. Autoblog Minute is a short-form video news series reporting on all things automotive. Each segment offers a quick and clear picture of what's happening in the automotive industry from the perspective of Autoblog's expert editorial staff, auto executives, and industry professionals.

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

Dodge and Jeep recalling 895k SUVs for possibility of headliner fires

Dodge and Jeep are announcing recalls of a total of 895,000 Durango and Grand Cherokee models worldwide from the 2011 through 2014 model years. There's a possibility that the wiring in the sun visor can short circuit and cause a fire. It specifically affects vehicles built between January 5, 2010, and December 11, 2013, and there are approximately 651,000 of them in the US, 45,700 in Canada, 23,000 in Mexico and 175,000 outside of North America.
Screws that fasten the sunvisor to the headliner may pierce wires in the visor, if the part has been removed or serviced, potentially causing a fire risk. If the wires short circuit, they could overheat and potentially combust. The automakers report three injuries caused by this defect, and according to the investigation by the National Highway Traffic Safety Administration, "there may be a total of 52 unique fire incidents."
To fix the problem, Dodge and Jeep will inspect the vehicles for suspect wiring, and all of the models, whether damaged or not, will get a new sun visor spacer with a wire guide to stop the possibility of short circuits. According to the automakers' announcement, "this condition is not present in vehicles which have not had the headliner or vanity mirror serviced." They will notify affected owners, and repairs will begin in August.