1963 Chrysler Newport on 2040-cars

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Why the Detroit Three should merge their engine operations

GM and FCA should consider a smaller merger that could still save them billions of dollars, and maybe lure Ford into the deal. Fiat-Chrysler CEO Sergio Marchionne would love to see his company merge with General Motors. But GM's board of directors essentially told him to go pound sand. So now what? The boardroom battle started when Mr. Marchionne published a study called Confessions of a Capital Junkie. In it, Sergio detailed the amount of capital the auto industry wastes every year with duplicate investments. And he documented how other industries provide superior returns. He's right, of course. Other industries earn much better returns on their invested capital. And there's a danger that one day the investors will turn their backs on the auto industry and look to other business sectors where they can make more money. But even with powerful arguments Marchionne couldn't convince GM to take over FCA. And while that fight may now be over, GM and FCA should consider a smaller merger that could still save them billions of dollars, and maybe lure Ford into the deal. No doubt this suggestion will send purists into convulsions, but so be it. The Detroit Three should seriously consider merging their powertrain operations, even though that's a sacrilege in an industry that still considers the engine the "heart" of the car. These automakers have built up considerable brand equity in some of their engines. But the vast majority of American car buyers could not tell you what kind of engine they have under the hood. More importantly, most car buyers really don't care what kind of engine or transmission they have as long as it's reliable, durable, and efficient. Combining that production would give the Detroit Three the kind of scale that no one else could match. There are exceptions, of course. Hardcore enthusiasts care deeply about the powertrains in their cars. So do most diesel, plug-in, and hybrid owners. But all of them account for maybe 15 percent of the car-buying public. So that means about 85 percent of car buyers don't care where their engine and transmission came from, just as they don't know or care who supplied the steel, who made the headlamps, or who delivered the seats on a just-in-time basis. It's immaterial to them. And that presents the automakers with an opportunity to achieve a staggering level of manufacturing scale. In the NAFTA market alone, GM, Ford, and FCA will build nearly nine million engines and nine million transmissions this year.

Ferrari borrows $2.6 billion to finance FCA spinoff

Ferrari announced Monday that it is borrowing about $2.6 billion to finance its spinoff from Fiat Chrysler Automobiles. Here's how it breaks down: Ferrari NV, the automaker's parent company based in the Netherlands, is taking out loans totaling 2.5 billion euros. That's equivalent to $2.64 billion at current exchange rates, and is divided between a term loan of $2.12 billion and a revolving credit facility of $529 million. The larger term loan "will be used to refinance indebtedness owing to Fiat Chrysler Automobiles," among other purposes. That ought to constitute the lion's share of the $2.38 billion which the Prancing Horse marque was, according to reports last year, slated to pay its current parent company in order to help FCA fund its ambitious growth plans. The separate line of credit is earmarked "to be used from time to time for general corporate and working capital purposes of the Ferrari group." Though Ferrari is not expected to take any other Fiat Chrysler properties with it, the "group" in this case would include its various financial services and distribution arms around the world that may have been separately incorporated. As noted in the statement below, the financial arrangement "represents a further step towards the separation of Ferrari from the FCA Group," following the separate stock issues from both companies as independent from each other. FERRARI N.V. SIGNS ˆ2.5 BILLION SYNDICATED CREDIT FACILITY Ferrari N.V. (NYSE: RACE) ("Ferrari") announced today that it has entered into a ˆ2.5 billion syndicated loan facility with a group of ten bookrunner banks. The facility comprises a bridge loan (the "Bridge Loan") and a term loan (the "Term Loan") of ˆ2 billion in aggregate and a revolving credit facility of ˆ500 million (the "RCF"). Proceeds of the Bridge Loan and Term Loan will be used to refinance indebtedness owing to Fiat Chrysler AutomobilesN.V. (NYSE: FCAU) ("FCA") and other indebtedness and for other general corporate purposes. Proceeds of the RCF may be used from time to time for general corporate and working capital purposes of the Ferrari group. The Bridge Loan has a 12 month maturity with an option for Ferrari to extend once for a six-month period. Ferrari intends to refinance the Bridge Loan prior to its maturity with longer term debt, including through capital markets or other financing transactions. The Term Loan, which comprises a majority of the total facility, and the RCF each have a maturity of five years.

Mopar Dodge Challenger special edition celebrates a mod decade

Despite the current Dodge Challenger hitting the age of 11 this year, it continues to be a top seller for the brand. One of the reasons for its popularity is its customizability. FCA acknowledges this with the just-revealed, limited-edition Mopar 2019 Dodge Challenger celebrating its factory-backed performance parts and accessories straight from the its own in-house parts division. For 10 years, Challenger owners have benefited from upgrades directly from Chrysler’s Mopar division. This has been a big deal because tuning a car often required aftermarket parts, which could jeopardize factory warranties. But with upgrades directly from original equipment manufacturers, such a risk was eliminated. “Over the last decade, weÂ’ve customized an impressive group of vehicles with exclusive Mopar performance parts and accessories that our enthusiast customers crave,” said Mark Bosanac, head of Mopar Service in a statement. “This year weÂ’re commemorating our tenth Mopar build with another unique and collectible Dodge Challenger, which continues to be the modern muscle car every bit as beloved today as the first-generation vehicle was 50 years ago.” The 2019 Mopar Dodge Challenger starts life as R/T Scat Pack model. Under the hood sits a 392-cubic inch (6.4-liter) Hemi V-8 with 485 horsepower and 475 pound-feet of torque with the choice of a six-speed manual or an eight-speed automatic. But Mopar sweetens the deal by adding a performance cold-air intake, strut tower braces to improve structural rigidity and handling, as well as strut caps and braces painted in silver for eye candy whenever the hood is popped. ItÂ’s only available in two hues, Pitch Black or White Knuckle, and comes with a variety of bespoke interior and exterior upgrades. They include special Mopar Shakedown graphics and blue striping from the front fascia all the way back to the rear decklid spoiler. Completing the look is a set of 20x9-inch forged aluminum wheels wrapped in Goodyear P245/45ZR20 performance tires and the optional shaker hood package made standard. Sales commence next month with a starting price of $45,835.