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Fiat Chrysler Australia executive in trouble over misuse of company funds

While the merger to create FCA was coming together, its managing director for Australia, Clyde Campbell, was allegedly racking up 30 million Australian dollars ($23.1 million) in spending for himself, family, and friends. Now, the former boss is facing a court case from the automaker's legal team for the purported misappropriation. Among the more opulent expenses that Campbell allegedly put on Chrysler's tab included a 40-foot yacht worth the equivalent of $308,000 and lavish Christmas parties for workers, according to The Age. Despite being required to only travel in economy class and get permission for international travel, he also reportedly racked up the equivalent of over $413,000 travel expenses. "The more we dug, the more we found," said an unnamed source to The Age. Campbell came to power in Australia as a general manager for DaimlerChrysler, and became managing director in October 2010. He was reportedly a close friend with former Mercedes-Benz USA CEO Ernst Lieb. After Lieb lost his wrongful dismissal lawsuit, Campbell allegedly helped his friend's partnership in an Aussie auto dealer by using FCA funds for financial support totaling the equivalent of about $3 million. All of this came to light when Pat Dougherty came over from the US to be president and CEO of FCA Australia in December 2014. The staff spilled the full story on Dougherty's first day. "I walked into his office and let it all out. I don't think he knew what hit him," another source said to The Age. A team of forensic accountants was brought in to investigate. The reason that this took so long to discover was that no one was paying attention. First, sales in Australia were growing under Campbell. Also, "in my opinion, back in Michigan, head office didn't have its eyes on the road. They only had eyes on the Fiat deal," an insider said to The Age. That confluence essentially provided the perfect storm for this huge spending. News Source: The AgeImage Credit: Giuseppe Cacace / AFP / Getty Images Government/Legal Chrysler Fiat lawsuit FCA

Honda may recall up to 1M vehicles for airbag issue, following Toyota's lead

It seems Toyota won't be the only one recalling the faulty Takata airbag inflators for long. Honda insiders in Japan claim that the company is getting close to announcing its own worldwide campaign that would begin before the end of June.
Unnamed sources close to Honda in Japan tell Automotive News that the company is pursuing an internal investigation into possibly affected models and is working with Takata to gather more information. They claim that it could involve even more than the 1.14 million cars worldwide that the automaker covered under the first recall for the problem in April 2013, including 561,000 vehicles in the US.
Toyota jumpstarted this process last week when it recalled over 2 million cars worldwide, including 844,277 in the US. Soon after, the National Highway Traffic Safety Administration began a preliminary evaluation into the issue following six reported incidents, and started assembling data about potentially affected models from Toyota, Honda, Mazda, Nissan, Chrysler. NHTSA also began investigating Takata itself.

Fiat Chrysler cuts 2018 outlook, shares tumble on weaker quarterly profit

MILAN — The news of former Fiat Chrysler chief executive Sergio Marchionne's death arrived Wednesday moments before the group reported a surprisingly heavy drop in profit. The death of one of the auto industry's most tenacious and respected CEOs overshadowed a big selloff in Fiat Chrysler shares. FCA's scheduled second-quarter earnings presentation, led by Marchionne's successor and former lieutenant Mike Manley, began on Wednesday afternoon with a moment of silence. As eulogies flooded in, FCA shares fell as much as 10 percent as investors digested an unexpected 35 percent fall in net profit, well below market forecasts. Marchionne rescued Fiat and Chrysler from bankruptcy after taking the wheel of the Italian carmaker in 2004 and he multiplied Fiat's value 11 times through 14 years of canny dealmaking. He was due to step down at FCA in April next year. "The best way to honor his memory is to build on the legacy he left us, continuing to develop the human values of responsibility and openness of which he was the most ardent champion," Chairman John Elkann added. On Saturday, FCA named Jeep division head Mike Manley, 54, as head of the world's seventh-largest carmaker, saying the Briton would execute a strategy that Marchionne had outlined in June. FCA has said Manley will work to ensure a "strong and independent" future for the group. Underlining the task facing Manley, FCA cut its full-year earnings outlook after the weaker-than-expected quarterly earnings. Having to deliver the bad news four days into his new job, Manley blamed the result on a weaker performance in China, a market that represents one of new CEO's immediate headaches. "The biggest challenges we face and frankly we're going to continue to face ... are all focused in China," Manley said. FCA has yet to make any significant inroads in China. In Marchionne's June plan, FCA pledged to boost production of sport utility vehicles and invest in electric and hybrid cars to double operating profit by 2022. It unveiled bold targets for Jeep, FCA's profit engine. FCA said adjusted earnings before interest and tax (EBIT) for the April-June period fell 11 percent to 1.7 billion euros ($1.99 billion), compared with 2 billion euros in a Reuters poll of analysts. Chinese demand slumped in the quarter ahead of a July cut in import duties, resulting in higher incentive spending and an increase in unsold vehicle stocks that "particularly affected Maserati," Manley said.