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EV cost burden pushing automakers to their limits, says Stellantis' CEO Tavares

DETROIT — Stellantis CEO Carlos Tavares said external pressure on automakers to quickly shift to electric vehicles potentially threatens jobs and vehicle quality as producers struggle with EVs' higher costs. Governments and investors want car manufacturers to speed up the transition to electric vehicles, but the costs are "beyond the limits" of what the auto industry can sustain, Tavares said in an interview at the Reuters Next conference released Wednesday. "What has been decided is to impose on the automotive industry electrification that brings 50% additional costs against a conventional vehicle," he said. "There is no way we can transfer 50% of additional costs to the final consumer because most parts of the middle class will not be able to pay." Automakers could charge higher prices and sell fewer cars, or accept lower profit margins, Tavares said. Those paths both lead to cutbacks. Union leaders in Europe and North America have warned tens of thousands of jobs could be lost. Automakers need time for testing and ensuring that new technology will work, Tavares said. Pushing to speed that process up "is just going to be counter productive. It will lead to quality problems. It will lead to all sorts of problems," he said. Tavares said Stellantis is aiming to avoid cuts by boosting productivity at a pace far faster than industry norm. "Over the next five years we have to digest 10% productivity a year ... in an industry which is used to delivering 2 to 3% productivity" improvement, he said. "The future will tell us who is going to be able to digest this, and who will fail," Tavares said. "We are putting the industry on the limits." Electric vehicle costs are expected to fall, and analysts project that battery electric vehicles and combustion vehicles could reach cost parity during the second half of this decade. Like other automakers that earn profits from combustion vehicles, Stellantis is under pressure from both establishment automakers such as GM, Ford, VW and Hyundai, as well as start-ups such as Tesla and Rivian. The latter electric vehicle companies are far smaller in terms of vehicle sales and employment. But investors have given Tesla and Rivian higher market valuations than the owner of the highly profitable Jeep and Ram brands. That investor pressure is compounded by government policies aimed at cutting greenhouse gas emissions. The European Union, California and other jurisdictions have set goals to end sales of combustion vehicles by 2035.

Maserati Levante will borrow Chrysler Pacifica Hybrid's PHEV powertrain

The plug-in hybrid tech from the 2017 Chrysler Pacifica Hybrid minivan will move seriously upmarket into a future version of the Maserati Levante crossover. The PHEV model should arrive around early 2018 or possibly the end of 2017, division boss Harald Wester told Motor Trend. Wester was blunt about the reason for using the minivan's powertrain. "A standalone program would be suicidal so we have to look at FCA," he said to Motor Trend. However, he expects the PHEV to comprise a tiny portion of the luxury CUV's sales volume – possibly as low as six percent. The Pacifica Hybrid will be the first PHEV minivan in the US when it arrives in the second half of 2016. The powertrain combines a 3.6-liter V6 that runs on the more efficient Atkinson cycle, and two electric motors, which are in the gearbox. A 16-kWh lithium-ion battery under the floor stores the energy for the system. Chrysler estimates the setup can carry the minivan 30 miles purely on electric power and achieve 80 MPGe. The first examples of the Levante should arrive in the US in August, according to Motor Trend. Maserati plans initially to offer its luxury crossover here with two twin-turbocharged 3.0-liter V6s. Base models use a version with 350 horsepower and 368 pound-feet of torque. The S trim gets some extra grunt thanks to a tune that makes 430 hp and 427 lb-ft. Both models come with an eight-speed automatic transmission, all-wheel drive, and a limited-slip differential. The Maserati will have a fleet of posh, European crossovers to fight against, and the PHEV will possibly offer an edge to entice a few green-minded, wealthy customers. Related Video:

Fiat Chrysler pleads guilty to paying off Detroit union officials

DETROIT — Fiat Chrysler pleaded guilty to conspiracy Monday, admitting that it paid off leaders of the United Auto Workers to try to win concessions in negotiations covering thousands of factory workers. FCA's conviction follows a series of guilty pleas from UAW officials who were showered with more than $3.5 million in cash and items of value from a jointly run training center over an eight-year period. FCA stands for Fiat Chrysler Automobiles, which now is part of Stellantis, a company created by the merger of Fiat Chrysler and PSA Peugeot. “FCA violated federal labor law and undermined the collective bargaining process and the faith of the UAWÂ’s membership in their leaders,” said acting U.S. Attorney Saima Mohsin. The head of FCA labor relations, Al Iacobelli, executed the scheme with five UAW officials and a spouse, especially General Holiefield, who was a union vice president. He eliminated a $262,000 home mortgage in 2014 with training center money. Union officials used credit cards for spending sprees. “Your honor, we plead guilty,” FCA general counsel Chris Pardi told U.S. District Judge Paul Borman. Iacobelli was sentenced to 5 1/2 years in prison in 2018, but the sentence was recently reduced by 18 months due to his cooperation. Holiefield died in 2015; his wife pleaded guilty to a tax crime three years later. Holiefield's successor, Norwood Jewell, was sentenced to 15 months in prison. His plea deal listed $60,000 in meals and golf paid with training center credit cards. FCA will pay a $30 million fine to the government. An independent monitor will be appointed to oversee the end of the training center as well as handle other tasks. The government's investigation became public in 2017, but agents soon were uncovering other corruption at the UAW. Union dues were used to pay for golf, booze and vacation villas in California, and contractors were giving kickbacks for union business. Eleven officials have been convicted, including former presidents Gary Jones and Dennis Williams. They are awaiting their sentences in Detroit federal court. Related Video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings. Earnings/Financials Government/Legal UAW/Unions Chrysler Fiat