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Google-FCA deal is a coup for both sides

FCA made a savvy play this week to team with internet giant Google. It's not as sexy as partnering with Apple, but it's almost as good. This move positions FCA to expand its capabilities in the autonomous driving field, and connecting with Google could boost the automaker's image. FCA will provide Google with about 100 Chrysler Pacifica hybrid minivans specially developed for autonomous testing. Google will integrate its sensors and computers into the vehicles. They'll work together at a site in Southeast Michigan and test the prototypes on Google's private test track in California. It's looks like an equitable deal and a win for both sides. "This marks a watershed event for the auto industry on two major levels: contract manufacturing for high tech firms and allowing such firms a clear pathway into the brain of the car," Morgan Stanley researchers said in a note. Don't underestimate how big this is for Google. The deal more than doubles the size of the tech firm's fleet, and does so with the Pacifica, a potentially segment-defining entry. Currently, it's using Lexus vehicles and other modified prototypes as testers. Though FCA is the smallest of Detroit's carmakers, it's also viewed as nimble and willing to embrace change. The Jeep and Ram divisions are as strong as any brand in the industry, and the Hellcats and Viper reinforce FCA's enthusiast cred. Google doesn't need those things, but they're pretty cool associations, nonetheless. If Ferrari can try to position itself as a leather goods maker, Google can have a little octane in its system. While experts expect Google to eventually partner with other automakers or to license its technology (FCA chief Sergio Marchionne reportedly said the deal isn't exclusive), FCA is positioned to get a head start. IHS Automotive predicts there will be 10.5 million self-driving or driverless cars used around the world by 2030. General Motors, Mercedes, Tesla, Volvo, Ford, and others have launched or are planning to roll out their own versions of autonomous driving technology. For now, FCA goes from having no apparent autonomous plans to potentially being among the leaders, and Google secures a legitimate automotive partner. Like we said, it looks like a win-win. NEWS & ANALYSIS News: Sergio Marchionne is taking over the CEO job at Ferrari. Analysis: This is a consolidation of Marchionne's power over the famous Italian sports-car maker and racing team.

Fiat Chrysler profit up as it closes in on retiring its debt

MILAN — Fiat Chrysler Automobiles reduced its debt by more than expected in the first quarter, putting the carmaker well on course to become cash positive later this year. Chief Executive Sergio Marchionne expects to cancel all debt during 2018 — possibly by the end of June — and generate around 4 billion euros ($5 billion) in net cash by the end of the year. Marchionne has said that forecast does not include any one-off measures, nor the impact of the planned spinoff of parts maker Magneti Marelli, which he hopes to execute by early 2019. The world's seventh-largest carmaker said on Thursday net debt had fallen to 1.3 billion euros ($1.6 billion) by the end of March, well below a consensus forecast of 2.6 billion euros in a Thomson Reuters poll of analysts. FCA said capital spending fell 900 million euros in the quarter due to "program timing," which analysts said implied higher investments for the rest of the year. The Italian-American group said first-quarter operating profit rose 5 percent to 1.61 billion euros, below a consensus forecast of 1.74 billion, as a weaker performance from its North American profit center weighed. Shipments there were higher due to the new Jeep Wrangler and Compass models. But currency moves hit revenues and earnings, and costs related to new product launches added to the pressure. FCA's shift to sell more trucks and SUVs boosted margins yet again in North America to 7.4 percent from 7.3 percent in the same quarter a year ago, although they were down from the 8 percent recorded in the preceding three months. Marchionne, preparing to hand over to an internal successor next year, is close to his goal of ending a margin gap with larger U.S. rivals General Motors and Ford. The 65-year-old has said becoming debt free and being able to compete on a par with U.S. peers would mean FCA no longer needed a partner to survive and could well succeed on its own. The CEO has previously said tying up with another carmaker would help to meet the huge costs in an industry investing in electric vehicles and automated driving. FCA shares fell immediately after the results, but recovered to trade up 3 percent at 19.71 euros by 1150 GMT, outperforming a 0.4 percent rise in Europe's blue-chip stock index. ($1 = 0.8214 euros) Reporting by Agnieszka FlakRelated Video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.

Jeep Wrangler 4xe's hybrid powertrain: Could it be headed to other FCA products?

On its own, the 2021 Jeep Wrangler 4xe plug-in hybrid is a big deal for the brand and the model line. It's the most powerful and most efficient Wrangler by significant margins, and it doesn't give up the off-road capability that makes the Wrangler so special. But another great thing about this hybrid powertrain is its potential to be transplanted into other FCA vehicles. Just to recap, the layout of the Wrangler's hybrid powertrain, front to back, is as follows: engine, clutch, electric motor, clutch, transmission. The engine is the same 2.0-liter turbocharged four-cylinder that's a standalone engine for the Wrangler. The transmission and electric motor are sort of one unit, with the motor and clutch replacing the torque converter of the transmission. And the transmission itself is the ubiquitous eight-speed ZF automatic gearbox. Its transmission code name is 8HP75PH. The ZF eight-speed is available in every FCA product with a longitudinally-mounted engine and rear-wheel drive or four-wheel drive, with variations in the amount of power and torque it can handle. Not only that, but the Ram 1500 and 2500 and the Jeep Wrangler and Gladiator all have powertrains that utilize the non-hybrid version of the 8HP75 transmission specifically. Even the gear ratios for that transmission as well as the 8HP70 used in the Jeep Grand Cherokee, Dodge Durango, Dodge Charger and Chrysler 300 are nearly identical to those in the 8HP75PH. And a Fiat-Chrysler representative confirmed that the transmission portion of the hybrid drivetrain is basically carry-over from the regular 8HP75. So a transplant could be a relatively simple process. As for which of these models would be the most likely to receive the hybrid powertrain first, the Jeep Gladiator and Ram 1500 would seem like good bets, since they likely have the most similar transmissions, and the Gladiator in particular because of its closely-related underpinnings to the Wrangler. Both are also highly profitable trucks that sell well and could justify the development costs of adapting another powertrain. And in the case of the Ram, there's the impending F-150 hybrid to think about. Although Ram isn't going after a fully electric model, a PHEV could be a nice middle ground. A potential limiting factor would be whether the hybrid powertrain would be sufficiently robust to handle heavy payload and towing demands, particularly over longer periods.