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Fiat Chrysler's Q3 profit boosted by strong North American earnings

MILAN, Italy — Fiat Chrysler Automobiles (FCA) reported a 17 percent jump in third-quarter adjusted operating profit on Tuesday, helped by a strong performance in its key North American market and improving operations in Europe and Latin America. The world's seventh-largest carmaker still makes the lion's share of its profits in North America, so improving, or at least maintaining, its margins there is a key focus. The carmaker reported an 8 percent adjusted operating profit margin in the region, up from 7.6 percent a year ago, despite a drop in sales and shipments. "FCA's profitability in North America remained strong in the quarter despite a weakening market there," a Milan-based analyst said. FCA's profitability compares with an 8.3 percent North America margin reached in the quarter by bigger U.S. rival GM , showing CEO Sergio Marchionne making progress towards his goal of closing the margin gap with GM and the company's other U.S. rival, Ford, by 2018. The company's confirmation of its full-year outlook also pushed shares higher, a trader added. The stock was up 2.8 percent by 1129 GMT, outperforming a 1 percent rise in the European auto index. FCA has been retooling some U.S. factories to boost output of sport-utility vehicles (SUVs) and trucks while ending production of some unprofitable sedans to strengthen profitability as the U.S. car market comes off its peak. The company said a drop in North America shipments due to lower fleet sales and discontinued models was partially offset by higher deliveries of Ram trucks and two models from the Alfa Romeo stable: the Stelvio sport utility vehicle and Giulia sedan. Profitability also improved in Europe, helped by sales of the Stelvio and the new Jeep Compass, and Latin America, while margins at Maserati remained strong at 13.8 percent due to strong demand for its first SUV, the Levante. In a later conference call, investors are looking for hints on the new strategy to 2022 which the company promised to unveil early next year. Chief Executive Sergio Marchionne said earlier this year that FCA would streamline its portfolio and that components businesses, including Magneti Marelli, would be separated from the group, possibly via a spin-off. While FCA confirmed its targets this year, doubts remain about its exposure to a weakening U.S. market, recall costs and potential fines over emissions after it was targeted by European and U.S.

Former Chrysler dealers could reopen under appeals court ruling

Years after the bankruptcies and subsequent bailouts of Chrysler (now FCA) and General Motors, the automotive industry is still seeing legal decisions about them come through the courts. The latest ruling from a US appeals court has given 4 of the 789 dealers that Chrysler closed in its Chapter 11 process one less hurdle towards reopening. Following the bankruptcy, 105 of the shuttered dealers went through an arbitration process in hopes of reopening, and 32 won their arguments. However, a victory in that undertaking didn't necessarily mean that the stores could reestablish themselves. For these three showrooms in Michigan and one in Las Vegas, state laws allowed nearby competitors from the same automaker to stand in the way of restarting, according to Automotive News. This problem brought yet another lawsuit, and a US district court found that the arbitration decisions did not overrule state laws. The latest appeals court ruling overturned that decision. However, as with many legal proceedings, the process for reopening for these dealers still isn't exactly easy. The latest decision only covers the nearby dealers' ability to protest; it doesn't mandate FCA actually to open the stores again. According to a statement from Michael Palese of FCA legal communications to Automotive News, the ruling, "did not provide for reinstatement of the dealers who prevailed in arbitration, but only gave them a right to a 'customary and usual' letter of intent." It means for these showrooms to start selling again, now they need to work things out with Chrysler's new owner.

All eyes on Detroit as automakers prepare for slow, careful reopening of plants

DETROIT — The U.S. factories that make Fords, Chevys and Jeeps are coming back to life this week as workers install new safety equipment and wake up machines ahead of the high-stakes restart the Detroit automakers plan to launch on Monday. Ford, General Motors and Fiat Chrysler Automobiles all plan to reopen North American factories on May 18. The reopening of the U.S. auto sector will be a closely watched test of whether workers across a range of industries can return to factories in large numbers without a resurgence of COVID-19 infections. How well the automakers do will be significant for the U.S. economy, as nearly 1 million workers are employed in the sector. Executives at Ford and GM said separately this week the companies have not recorded any cases of COVID-19 transmission in plants outside the United States since adopting new safety protocols. Those procedures include mandatory face masks, separation of workers on assembly lines, frequent cleaning of work areas and requirements that workers pass through temperature monitors and report any symptoms before entering a plant. The Detroit Three have taken unprecedented steps to share information about coronavirus safety practices and develop a common set of workplace standards for their restarts, working with the United Auto Workers union, executives said. "We thought it was critical that we did it together," Ford manufacturing and labor chief Gary Johnson told Reuters. "We've never done this as an industry." The Detroit automakers will restart U.S. plants without regular testing of workers, because they do not have access to sufficient testing capacity, executives and UAW officials said. They will test workers who report COVID-19 symptoms or have fevers discovered by temperature scanners installed at factory entrances. "We have to continue to push for this testing," United Auto Workers union Vice President Cindy Estrada told Reuters on Wednesday. "Unless we have testing weekly to keep sick people out of the plant there is always a risk." Adopting new safety practices is just part of the work the companies must do to reopen after an extraordinary shutdown that has lasted two months.   Wave zero At Ford, workers going in to ready factories are part of what Chief Operating Officer Jim Farley calls "wave zero." The work of wave zero employees "is really important for success of the startup," he said in an interview.