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FCA shifts Ram Heavy Duty trucks from Mexico to U.S., creating 2,500 jobs

DETROIT — Fiat Chrysler Automobiles said on Thursday it will shift production of Ram Heavy Duty pickup trucks from Mexico to Michigan in 2020, a move that lowers the risk to the automaker's profit should President Donald Trump pull the United States out of the North American Free Trade Agreement. Fiat Chrysler said it would create 2,500 jobs at a factory in Warren, Michigan, near Detroit, where the Ram 1500 is currently built, and FCA will invest $1 billion in the facility. The Mexican plant will be "repurposed to produce future commercial vehicles" for sale global markets. Mexico has free trade agreements with numerous countries. Fiat Chrysler Chief Executive Sergio Marchionne a year ago raised the possibility that the automaker would move production of its heavy-duty pickups to the United States, saying U.S. tax and trade policy would influence the decision.If the United States exits NAFTA, it could mean that automakers would pay a 25 percent duty on pickup trucks assembled in Mexico and shipped to the United States. About 90 percent of the Ram pickups made at Fiat Chrysler's Saltillo plant in Mexico are sold in the United States or Canada, company officials said. Negotiators for the United States, Mexico and Canada are scheduled to meet later this month for another round of talks on revising NAFTA. Canadian government officials earlier this week said they are convinced that Trump intends to announce his intention to quit the agreement. Trump has threatened to force the rollback of NAFTA, which enables the free flow of goods made in the United States, Canada and Mexico across the borders of those countries. He also has criticized automakers for moving jobs and investment in new manufacturing facilities to Mexico and prodded them to add more auto production in the United States. View 31 Photos On Wednesday, Toyota and Mazda announced they would build a new $1.6 billion auto assembly plant in Alabama, drawing praise from Trump. Vice President Mike Pence praised Fiat Chrysler's announcement. "Manufacturing is back. Great announcement. Proof that this admin's AMERICA FIRST policies are WORKING!" Pence said in a Twitter posting. Chrysler raised its output in Mexico by 39 percent in 2017 to 639,000 vehicles, according to Mexican government data. That made Fiat Chrysler the third-largest producer of vehicles in Mexico in 2017, after Nissan and General Motors.

Stellantis expects strike to cost it $795 million in third-quarter profits

MILAN — Automaker Stellantis said Tuesday that the autoworkers strike in North America is expected to cost the company around 750 million euros ($795 million) in profits — less than its North American competitors. The Europe-based maker of Jeep, Fiat and Peugeot reported a 7% boost in net revenues to 45.1 billion euros, with production halts caused by the strikes costing the company 3 billion euros in sales through October. The net revenue boost was due to higher volumes in all markets except Asia. Chief Financial Officer Natalie Knight told journalists that StellantisÂ’ strike impact was lower than the other Big Three automakers due to its global profile as well as some high-profile cost-cutting measures, calculating the hit at around 750 million euros ($795 million.) GM, the last carmaker to reach a deal to end the strike, reported an $800 million strike hit. Ford has put its impact at $1.3 billion. “We continue to be in a very strong position globally and in the U.S. This is an important market for us, and weÂ’re highly profitable and we are very committed to our future," Knight said. “But mitigation is core to how we act, and how we proceed.” Stellantis has canceled appearances at the CES technology show in Las Vegas next year as well as the LA Auto Show, due to the strike impact. Stellantis on Saturday reached a tentative agreement with the United Auto Workers Union to end a six-week strike by more than 14,000 workers at its assembly plants in Michigan and Ohio, and at parts warehouses across the nation. Stellantis does not report full earnings for the third quarter, instead providing shipments and revenues. It said that global sales of electric vehicles rose by 37% over a year earlier, powered by the Jeep Avenger and commercial vehicle sales. North America continued to be the revenue leader, contributing 21.5 billion euros, an increase of 2% over last year, and representing nearly half of global revenues. Europe, the next biggest performing region, saw revenues grow 5% to 14 billion euros, as sales rose 11%. Related video: Earnings/Financials UAW/Unions Alfa Romeo Chrysler Dodge Fiat Jeep Maserati RAM

Auto Mergers and Acquisitions: Suicide or salvation?

We love the Moses figure. A savior riding in from stage right with the ideas, the smarts, and the scrappiness to put things right. Alan Mullaly. Carroll Shelby. Lee Iacocca. Andrew Carnegie. Steve Jobs. Elon Musk. Bart Simpson. Sergio Marchionne does not likely view himself with Moses-like optics, but the CEO of Fiat Chrysler Automobiles recently gave a remarkable, perhaps prophetic interview with Automotive News about his interest and the inevitability of merging with a potential automotive partner like General Motors. Marchionne has been overtly public about his notion that GM must merge with FCA. For a bit of context, GM sold 9.9 million vehicles in 2014, posting $2.8 billion in net income, while FCA sold 4.75 million units and earned $2.4 billion in net income, painting a very rosy FCA earnings-to-sales picture. But that's not the entire picture. Most people in the auto industry still remember the trainwreck that was the DaimlerChrysler "merger" written in what turned out to be sand in 1998. It proved to be a master class in how not to fuse two companies, two cultures, two continents, and two management teams. Oh, it worked for the two individuals at both helms pre-merger. They got silly rich. And the industry itself was in a misty romance at the time with mergers and acquisitions. BMW bought Rolls-Royce. Volkswagen Group bought Bentley, Bugatti, and Lamborghini, putting all three brands into their rightful place in both products and positioning. No marriages there, so no false pretense. Finally, Nissan and Renault got married in 1999. A successful marriage requires several rare elements in this atmosphere of gas fumes and power lust. But a successful marriage requires several rare elements in this atmosphere of gas fumes and power lust, the principle part being honesty. Daimler and Chrysler lied to each other. The heads of each unit, the product planners, and finance all presented their then-current and long-range forecasts to each other with less-than-forthright accuracy. Daimler was the far greater equal and no one from the Chrysler side enjoyed that. The cultures were entirely different, too, and little was done to bridge that gap. Which brings me back to the present overtures by Marchionne to GM. "There are varying degrees of hugs," Marchionne stated in the Automotive News piece. "I can hug you nicely, I can hug you tightly, I can hug you like a bear, I can really hug you." Seriously?