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Fiat Chrysler Australia executive in trouble over misuse of company funds

While the merger to create FCA was coming together, its managing director for Australia, Clyde Campbell, was allegedly racking up 30 million Australian dollars ($23.1 million) in spending for himself, family, and friends. Now, the former boss is facing a court case from the automaker's legal team for the purported misappropriation. Among the more opulent expenses that Campbell allegedly put on Chrysler's tab included a 40-foot yacht worth the equivalent of $308,000 and lavish Christmas parties for workers, according to The Age. Despite being required to only travel in economy class and get permission for international travel, he also reportedly racked up the equivalent of over $413,000 travel expenses. "The more we dug, the more we found," said an unnamed source to The Age. Campbell came to power in Australia as a general manager for DaimlerChrysler, and became managing director in October 2010. He was reportedly a close friend with former Mercedes-Benz USA CEO Ernst Lieb. After Lieb lost his wrongful dismissal lawsuit, Campbell allegedly helped his friend's partnership in an Aussie auto dealer by using FCA funds for financial support totaling the equivalent of about $3 million. All of this came to light when Pat Dougherty came over from the US to be president and CEO of FCA Australia in December 2014. The staff spilled the full story on Dougherty's first day. "I walked into his office and let it all out. I don't think he knew what hit him," another source said to The Age. A team of forensic accountants was brought in to investigate. The reason that this took so long to discover was that no one was paying attention. First, sales in Australia were growing under Campbell. Also, "in my opinion, back in Michigan, head office didn't have its eyes on the road. They only had eyes on the Fiat deal," an insider said to The Age. That confluence essentially provided the perfect storm for this huge spending. News Source: The AgeImage Credit: Giuseppe Cacace / AFP / Getty Images Government/Legal Chrysler Fiat lawsuit FCA

Jeep Cherokee faces on-sale delay

A report in The Wall Street Journal looks at some of the obstacles to the 2014 Jeep Cherokee that go beyond its mootable yet "very contemporary" looks, almost all of them based on Fiat's financial position. Starting with that sheetmetal, in defense of it SRT president Ralph Gilles and Jeep design head Mark Allen said they wanted to "make sure the design still looks modern five years from now."
The WSJ piece doesn't cite longevity as a factor, instead saying that its features originated in a design for an Alfa Romeo, the transformation into a Jeep design meant allowing Chrysler get it to market more quickly and save "hundreds of millions of dollars" in engineering.
The need for Fiat to save money while it weathers the European situation has cut budgets for development, engineering and the pace of retooling the Toledo, Ohio plant to build the Cherokee. In a familiar case of snowballing at work, among the effects will be pushing back the Cherokee's volume sales date and delaying updates to some of Chrysler's other products.

The USPS needs 180,000 new delivery vehicles, automakers gearing up to bid

Winning the New York City Taxi of Tomorrow tender was a huge prize for Nissan, even though the company is still working through the process of claiming its prize. The United States Postal Service has begun the process to take bids for a new delivery vehicle to replace the all-too-familiar Grumman Long Life Vehicle, and that will be a much larger plum for the automaker who wins it, perhaps worth more than six billion dollars. The Grumman LLV is an aluminum body covering a Chevrolet S-10 pickup chassis and General Motors' Iron Duke four-cylinder engine. The USPS bought them from 1987 to 1994, and the 163,000 of them still in service are a monumental drain on postal resources: they get roughly ten miles to the gallon instead of the quoted 16 mpg, drink up more than $530 million in fuel each year, and their constant repair needs like the balky sliding door and leaky windshields have led the service to increase the annual maintenance budget from $100 million to $500 million. A seat belt is about as modern as it gets for safety technology, and the USPS says that assuming things stay the same, it can't afford to run them beyond 2017. Last year it put out two triage requests for proposals seeking 10,000 new chassis and drivetrains for the Grumman and 10,000 new vehicles. The LLV is also too small for the modern mail system in which package delivery is growing and letter delivery is declining. The service says it doesn't have a fixed idea of the ideal "next-generation delivery vehicles," but it listed a number of requirements in its initial request and is open to any proposal. Carriers have some suggestions, though, saying they want better cupholders, sun visors that they can stuff letters behind, a driver's compartment free of slits that can swallow mail, and a backup camera. The request for information sent to automakers pegs the tender at 180,000 vehicles that would cost between $25,000 and $35,000 apiece, and it will hold a conference on February 18 to answer questions about the contract. GM is the only domestic maker to avow an interest, while Ford and Fiat-Chrysler have remained cagey. Yet with a possible $6.3 billion up for grabs and some new vans for sale that would be advertised on every block in the country, we have a feeling everyone will be listening closely come February 18. We also have a feeling the LeMons series is going to be flooded with Grummans come 2017. News Source: Wall Street Journal, Automotive News - sub.