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Chrysler and Fiat offering $1,000 rebates to VW owners as Marchionne gets tough

The throw-down between Fiat CEO Sergio Marchionne and Volkswagen has heated up in earnest. According to Bloomberg, Fiat and Chrysler are now offering current Volkswagen owners in the US $1,000 rebates to trade in their ride. It's the latest in a series of shots Marchionne has taken at his German rival. As you may recall, the Fiat executive entered into a spat with Volkwagen board chairman Ferdinand Piëch and CEO Martin Winterkorn in October after the duo called for Marchionne's resignation from presidency of the European Automotive Manufacturers Association (AECA). At the time, the Volkswagen executives were quoted as saying Fiat would not survive the European economic downturn.
In response, Marchionne called the German executives "reprehensible," and accused Volkswagen of using a pricing strategy that has created created a "bloodbath" in the EU. Volkswagen has taken to steep discounting to carve out ever-larger slices of market share in Europe, but the company has a much smaller foothold in the US. Marchionne may be trying to hit Volkswagen where the manufacturer is weakest with the new Fiat new incentive program.
Late last week, the Fiat executive was voted to a second term as ACEA president.

VW recalls 25k Jettas over low-beam headlight issue

Volkswagen has discovered an issue with the headlamps on its latest Jetta and is issuing a recall notice in conjunction with the National Highway Traffic Safety Administration to correct the issue. The problem revolves around the headlight control module, which has been found in certain instances to switch off the low-beam headlights when the high beams are turned on. Needless to say, that could result in insufficient illumination in the dark, so VW is moving to update the module's software. The issue only affects the new 2015 Jetta – specifically those manufactured between July 11, 2014 (which just happens to be this writer's birthday, thank you very much) and November 13, 2014. All in all, the Volkswagen Group of America estimates that encompasses 25,007 units in the United States, the owners of which can expect to hear from their dealers in the new year. RECALL Subject : Insufficient Headlight Output Report Receipt Date: DEC 15, 2014 NHTSA Campaign Number: 14V790000 Component(s): EXTERIOR LIGHTING Potential Number of Units Affected: 25,007 All Products Associated with this Recall close VOLKSWAGEN JETTA 2015 Manufacturer: Volkswagen Group of America, Inc. SUMMARY: Volkswagen Group of America, Inc. (Volkswagen) is recalling certain model year 2015 Jetta vehicles manufactured July 11, 2014, to November 13, 2014. Due to incorrect software within the headlight control module, the low beam headlights may turn off when high beam lights are turned on. As a result, the light output from the headlights may be insufficient. As such, these vehicles fail to comply with the requirements of Federal Motor Vehicle Safety Standard (FMVSS) No. 108. "Lamps, Reflective Devices, and Associated Equipment." CONSEQUENCE: Insufficient headlight output may increase the risk of a crash. REMEDY: Volkswagen will notify owners, and dealers will update the headlight control module software, free of charge. The recall is expected to begin in January 2015. Owners may contact Volkswagen customer service at 1-800-893-5298. Volkswagen's number for this recall is 57F6. 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.

VW using other manufacturing locations as leverage in battle with TN [w/video]

We've reached a new step in the ongoing drama at Volkswagen's factory in Chattanooga, TN. The United Auto Workers recently dropped its opposition to the union vote and agreed that it wouldn't hold another ballot for at least a year. Now, the new question becomes where VW is going to build its forthcoming midsize SUV.
Earlier, it had been considered all but certain that the SUV, likely a production version of the CrossBlue concept (pictured above), would be built in Tennessee. However, it seems the Chattanooga factory might have competition to produce it. In emails obtained by The Detroit News, VW's lawyer wrote to the Tennessee economic development department in January saying, "While we understand there are some 'non-deal' issues that are causing a delay in the TN solution, VW has been successful in reaching agreement on terms at the alternative locations."
As previously reported, the state of Tennessee allegedly offered VW about $300 million in incentives to build the vehicle there and create an estimated 1,350 jobs, but it later rescinded the deal. Newly leaked documents from NewsChannel 5 (WTVF-TV) in Nashville allegedly show just how close that offer was to being completed. It appears that VW actually sent the government the first draft of a memorandum of understanding agreeing to the incentives, but the state removed the offer in late January.