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Fiat Chrysler's profit boosted by Ram and Jeep in North America

MILAN/DETROIT — Fiat Chrysler took the market by surprise by sticking to its full-year profit guidance on Wednesday after a strong performance from its Ram pickup truck in North America helped it defy an industry slowdown. Chief Executive Mike Manley, in FCA's first earnings release since a failed attempt to merge with France's Renault, also left the door open to that or other deals. "We are open to opportunity," Manley said on a call with analysts. "I have no doubt why there still would be interest in it," he added, when pressed on what it would take to revive talks with Renault. Manley declined to comment further. FCA last month abandoned its $35 billion merger offer for Renault, blaming French politics for scuttling what would have been a landmark deal to create the world's third-biggest automaker. Manley said a merger was not a must-have and Fiat Chrysler's business plan was strong. The company said it remained confident its adjusted earnings before interest and tax (EBIT) would top last year's 6.7 billion euros ($7.5 billion). Given disappointing forecasts from other automakers this earnings season, FCA's confirmation of the outlook sent Milan-listed shares in the Italian-American automaker, whose other brands include Jeep, up over 4%. A broad-based auto sales downturn has rattled the sector, forcing FCA's competitors — including Renault, Daimler and Aston Martin — to cut their sales forecasts after second-quarter results, while U.S. carmaker Ford gave a weaker-than-expected 2019 profit outlook. Japan's Nissan, a long-term partner of Renault, said it would cut 12,500 jobs by 2023 after its earnings collapsed. In the second quarter FCA's adjusted EBIT totaled 1.52 billion euros, versus analysts' expectations of 1.43 billion euros, according to a Reuters poll. FCA's U.S. shipments were down 12% in the second quarter but the group said that the successful performance of its Ram brand resulted in an enhanced share of the large pickup truck market of 27.9%, up 7 percentage points from last year. Adjusted EBIT margin in North America rose to 8.9% from 6.5% in the first quarter, thanks to strong demand for the heavy-duty Ram and the new Jeep Gladiator pickup. Chief Financial Officer Richard Palmer also said FCA expected to report up to 10% margins in the region in both the third and fourth quarters.

Autoblog Minute: Wrangler Pickup, Triumph Fined, Cherokee Production Moves

Autoblog senior editor Greg Migliore reports on highlights from the week in automotive news on this edition of Autoblog Minute. Show full video transcript text [00:00:00] Triumph Motorcycles in violation of the Safety Act, Jeep looks to adjust its vehicle production strategy, and a Wrangler pickup may soon be be produced in Toledo. I'm senior editor Greg Migliore, and this is your Autoblog Minute Weekly Recap. Triumph Motorcycles was hit with a $2.9-million fine because of a failure to submit safety documents to NHTSA in a timely fashion. An investigation of 1,300 bikes in September of 2014 led to this finding. Other violations were then discovered, like the late reporting of quarterly recall completion rates, and Triumph's failure to supply warranty data. Fines for these violations may seem harsh but U.S. Transportation Secretary Anthony Foxx said: "Manufacturers must comply with their reporting obligations. The law requires it, and public safety demands it. When companies fail to meet those obligations, we will hold them accountable." In FCA news, it seems that production of the Jeep Cherokee will be moved from the Toledo plant to a nearby state. Automotive News first reported on this adding that Jeep may produce a pickup alongside Wrangler to fill the void left by Cherokee. Jeep declined to comment on this news. Speculation surrounding Jeep's production plans depends on the automaker's ongoing negotiations with the UAW. Those are the highlights from the week that was. Be sure to check out my full recap this Saturday, including details on Ford's performance Fusion. For Autoblog, I'm Greg Migliore. 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. Jeep Autoblog Minute Videos Original Video Triumph Motorcycles

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.