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China-FCA merger could be a win-win for everyone but politicians

NEW YORK — Fiat Chrysler boss Sergio Marchionne has said the car industry needs to come together, cut costs and stop incinerating capital. So far, his words have mostly fallen on deaf ears among competitors in Europe and North America. But it appears Marchionne has finally found a receptive audience — in China. FCA shares soared Monday after trade publication Automotive News reported the $18 billion Italian-American conglomerate controlled by the Agnelli family rebuffed a takeover from an unidentified carmaker from the Chinese mainland. As ugly as the politics of such a combination may appear at first blush, a transaction could stack up industrially, and perhaps even financially. A Sino-U.S.-European merger would create the first truly global auto group. That could push consolidation to the next level elsewhere. Moreover, China is the world's top market for the SUVs that Jeep effectively invented, so it might benefit FCA financially. A combo would certainly help upgrade the domestic manufacturer; Chinese carmakers have gotten better at making cars, but struggle to build global brands, and they need to develop export markets. Though frivolous overseas shopping excursions by Chinese enterprises are being reined in by Beijing, acquisitions that support the modernization and transformation of strategic industries still receive support, and the government considers the automotive industry to be strategic. A purchase of FCA by Guangzhou Automobile, Great Wall or Dongfeng Motors would probably get the same stamp of approval ChemChina was given for its $43 billion takeover of Syngenta. What's standing in the way? Apart from price (Automotive News said FCA's board deemed the offer insufficient) there's the not-insignificant matter of politics. Even as FCA shares soared, President Donald Trump interrupted his vacation to instruct the U.S. Trade Representative to look into whether to investigate China's trade policies on intellectual property. Seeing storied Detroit brands like Jeep, Chrysler, Ram and Dodge handed off to a Chinese company would provoke howls among Trump's economic-nationalist supporters. It might not play well in Italy, either, to see Alfa Romeo and Maserati answering to Wuhan instead of Turin — though Automotive News said they might be spun off separately. Yet, as Morgan Stanley observes, "cars don't ship across oceans easily," and political considerations increasingly demand local manufacture of valuable products.

Chrysler set to make $266M-investment into 8-speed transmission production

Chrysler will shortly make a significant $266-million investment into its Kokomo, IN transmission factory in a bid to expand production of its eight-speed automatic transmissions. The gearboxes, which are built under license from Germany's ZF Friedrichshafen, have been well received by customers and critics, and according to an SEC filing obtained by Automotive News, the transmissions will eventually find their way to all of Chrysler's rear-drive offerings (Viper and heavy-duty Ram models, aside). According to AN, a Chrysler spokesman says the investment has not been confirmed, but once it is, it'll mark the company's latest in a growing line of investments at the facility. Chrysler has poured $1.5 billion into Kokomo since 2009.

2019 Dodge Challenger, Charger salute troops with Stars and Stripes Edition

For the New York Auto Show, Dodge is showing off a new style package for the 2019 Dodge Challenger and Charger that goes by the name Stars and Stripes. As you may have guessed, the new package is military-themed as a salute to American troops. And since Dodge claims the Challenger and Charger have more active military buyers than any other car in their respective segments, this seems like a good move. What makes the Stars and Stripes models unique starts with a black and silver center stripe along with black wheels, badging, and American flag fender decals. Cars with four-piston Brembo brake calipers get the calipers painted in bronze. This matches the interior, which is finished in black cloth with bronze stitching everywhere from the steering wheel to the door panels. The finishing touches are bronze embroidered stars on the seats. The whole package is available on Scat Pack and R/T versions of the Challenger and Charger, plus the Challenger GT and the Charger GT RWD. It also adds $1,995 to the base price of each car. Besides the Stars and Stripes package, Dodge has expanded availability of two other packages. The first is the Painted Satin Black Appearance Package, which was initially exclusive to the Demon and Challenger Hellcat, but will now be available on the Charger Hellcat. It adds a hand-painted hood, roof, trunk and spoiler to the car and runs $3,450. The other package is the Brass Monkey Package. It's now available on Challenger and Charger Scat Pack, R/T and Challenger GT and Charger GT RWD models. It adds bronze-painted 20-inch wheels, satin black badging, fuel door lid and spoiler, and it costs $795.