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Another blow for Canadian autoworkers: FCA to lay off 1,500 at Windsor

Fiat Chrysler says it will cut a third shift at its Windsor Assembly Plant in Ontario, meaning layoffs for 1,500 workers in response to softening sales of the Chrysler Pacifica minivan. Separately, FCA announced it was moving up the scheduled two-week shutdown at the plant by one week, to the weeks of April 1 and 8. It's the latest blow for blue-collar autoworkers in Canada, who have been rocked by the potential closure of GM's assembly plant in Oshawa, Ontario, after production of the Chevrolet Impala and Cadillac XTS ends later this year. It will be the first time since 1993 that FCA's Windsor plant has operated on just two shifts, but the shutdown that began this week marks the third time the plant has been shut down this year. The Detroit News reports that action at the Windsor plant would be effective Sept. 30. It quoted Dave Cassidy, president of Unifor Local 444, at a news conference late last week: "People's lives — 1,500 direct families — depend on us," he said. "We're going to do everything possible to make sure we maintain three shifts. Everyone knows our product in Windsor is No. 1, and if you want to build it right, you want to build it in Windsor." FCA says it's making the cutback to better align production with demand. Through the first two months of 2019, U.S. sales of the Pacifica were down 24 percent to 14,817, with sales of the Grand Caravan, which is also built in Windsor, down 27 percent to 19,634. For the full-year 2018, Pacifica sales were flat at 118,322, while Grand Caravan sales rose 21 percent to 151,927. In Canada, the Pacifica saw a 3 percent drop in 2018 to just 5,999. FCA says it plans to offer retirement packages to eligible employees and will try to place laid-off hourly workers in open positions elsewhere as they become available. The company in February announced plans to invest $4.5 billion across the river to build a new assembly plant in Detroit and expand production at five other local plants in a move that will see it create 6,500 new jobs, pending certain assistance from the city of Detroit. The new Detroit plant will transform the existing Mack Avenue Engine facility into a production site for the next-generation Jeep Grand Cherokee and a new three-row Jeep SUV. That plan alone is said to involve 3,850 new jobs.

Harsh words from senators over Chrysler's delay in reporting hack

The federal agency charged with protecting American motorists wants to know more about how hackers remotely commandeered and controlled a Jeep Cherokee. Hours after Fiat Chrysler Automobiles recalled 1.4 million cars affected by a flaw in their cellular connections, officials with the National Highway Traffic Safety Administration said Friday they'll further probe the defect by conducting a formal recall query investigation. "Opening this investigation will allow NHTSA to better assess the effectiveness of the remedy proposed," the agency said in a written statement. The remedy works, said Chris Valasek, one of the researchers who first discovered the security flaw. After testing for the vulnerability again Friday, he wrote on Twitter: "Looks like I can't get to @0xcharlie's Jeep from my house via my phone. Good job FCA/Sprint!" From his Pittsburgh home, Valasek had previously accessed and controlled co-worker Charlie Miller's Jeep along a St. Louis highway. Researchers have demonstrated remote hacks before, but the scope and severity of the Jeep vulnerability was unprecedented. The recall for a cyber threat was the first of its kind. Although a software patch and changes made by cellular provider Sprint appeared to fix the problem, news of the exploit and Chrysler's response brought a fresh round of consternation on Capitol Hill, where federal lawmakers had already expressed concerns about automotive cyber security. The Jeep hack elevated their concerns to a new level. "Cyber threats in cars are real and urgent, no figment of the imagination, as this huge recall demonstrates," said Sen. Richard Blumenthal (D-CT). "Incredibly, Chrysler delayed disclosing this chilling cyber-security danger egregiously and inexcusably, and strong sanctions are appropriate to send a message that other auto manufacturers will heed." Chrysler had known about the security gap since October, and Sen. Ed Markey (D-MA) wondered why it took the company so long to let customers know they were at risk. "Despite knowing about this security gap for nearly nine months, Chrysler is only now recalling 1.4 million vehicles to fix this vulnerability," he said. That's a potential pitfall for Chrysler, and something NHTSA will likely address in its investigation. Automakers are supposed to report safety-related defects to the agency within five days of discovery. But according to a chronology of events Chrysler submitted in its recall paperwork, it didn't inform NHTSA until July 15.

Fiat Chrysler posts $690M Q1 loss

If there is one thing that should be remembered when looking at quarterly and annual earnings, it's that the headline numbers rarely tell the whole story when it comes to an automaker's health. Chrysler's first-quarter earnings are just such an example.
Yes, the Auburn Hills-based manufacturer lost $690 million, which is quite a large sum of money. The reasons for the loss, according to Chrysler, were "Unfavorable infrequent items," which includes a $504 million payment to rid itself of the debts it took on for prepaying the UAW's VEBA healthcare trust. Chrysler was also hit with a $672 million charge to the UAW, which was part of a deal that allowed Fiat to purchase the remaining shares of Chrysler owned by the VEBA.
Ignoring those one-time deals, the first quarter was quite a successful one for Chrysler. It would have made $486 million if you erased the merger costs, which would have been a year-over-year increase of $320 million. Even more promising is the fact that Chrysler snagged the largest increase in market share of any automaker during Q1 at 1.1 percent, bringing its overall share to 12.7 percent of the US market. Chrysler saw a 30-percent improvement in sales of trucks and SUVs, along with an 11-percent increase in year-over-year sales and a 23-percent increase in revenue, to $19 billion.