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FCA to recall nearly 900,000 vehicles that don't meet emissions standards

WASHINGTON — Fiat Chrysler Automobiles will recall 862,520 gasoline-powered vehicles in the United States that do not meet U.S. emissions standards, the Environmental Protection Agency said on Wednesday. The recall was prompted by in-use emissions investigations conducted by the EPA and in-use testing conducted by Fiat Chrysler as required by U.S. regulations, the agency said. EPA said it will continue to investigate other Fiat Chrysler vehicles that are potentially noncompliant and may become the subject of future recalls. The recall includes 2011-2016 Dodge Journeys, 2011-2014 Chrysler 200s and Dodge Avengers, 2011-2012 Dodge Calibers and 2011-2016 Jeep Compass/Patriots. Fiat Chrysler said in a statement the EPA announcement "has no safety implications. Nor are there any associated fines." "The issue was discovered by FCA during routine in-use emissions testing and reported to the agency," the company said. "We began contacting affected customers last month to advise them of the needed repairs, which will be provided at no charge." Its U.S.-traded shares were down 1 percent. "EPA welcomes the action by Fiat Chrysler to voluntarily recall its vehicles that do not meet U.S. emissions standards," EPA Administrator Andrew Wheeler said in a statement. "We will provide assistance to consumers navigating the recall and continue to ensure that auto manufacturers abide by our nation's laws designed to protect human health and the environment." Fiat Chrysler owners can continue to drive their vehicles, the government said. Due to the "large number of vehicles involved and the need to supply replacement components — specifically to the vehicle's catalytic converter — this recall will be implemented in phases during the 2019," the EPA said In January, Fiat Chrysler agreed to a settlement worth about $800 million to resolve claims by the U.S. Justice Department and state of California that it used illegal software to produce false results on Ran and Jeep vehicles. But that incident involved diesel engines. It is awaiting the outcome of a criminal probe. The hefty penalty was the latest fallout from the U.S. government's stepped-up enforcement of vehicle emissions rules after Volkswagen AG admitted in September 2015 to intentionally evading emissions rules.

Fiat Chrysler dumped 40,000 unordered vehicles on dealers

In a move that echoes recent history, Fiat Chrysler has been making more cars and trucks than dealers in the U.S. are willing to accept, with Bloomberg reporting that at one point the automaker had built up a glut of around 40,000 unordered vehicles. That’s led some dealers to accuse FCA of reviving the dreaded “sales bank” accounting practice of obscuring inventory to improve the balance sheet. The company reportedly began building up its inventory of unordered cars this summer despite an industrywide slowdown in sales and an eagerness by some dealers to thin their inventories because rising interest rates are making it more expensive to hold unsold cars. The inventory build-up also coincided with Fiat ChryslerÂ’s efforts to find a merger partner, first with Renault, which fell through, then last monthÂ’s announcement that it will merge with FranceÂ’s PSA Group. FCA denies any such scheme and tells Bloomberg the rising inventory is down to a new predictive analytics system designed to better square supply with demand from dealers that is helping the company save money and narrow the numbers of unsold vehicles. The company recently agreed to pay a $40 million civil penalty to the U.S. Securities and Exchange Commission to settle a complaint that it paid dealers to report fake sales figures over a span of five years. While no one is suggesting that FCA is in dire financial straits — the company saw higher than expected earnings in the third quarter and record profits in North America — the practice has strong historical precedent by Chrysler, which built up bloated inventories in the run-up to its two federal bailouts, in 1980 and 2009. It was also common at GM and Ford during the 2000s, when all three Detroit automakers struggled with excess manufacturing capacity and plummeting sales in the lead-up to the Great Recession. Back in 2012, CFO Magazine wrote about a report that explained automakersÂ’ rationale for the practice and how it works: Say fixed costs for a given factory are $100, and that the factory can make 50 cars. Consumers, however, demand only 10. Under absorption costing, if the company makes all 50 cars, its cost-per-car is $2. If it makes only up to demand, or 10 cars, the cost-per-car is $10. Although each car adds variable costs for steel and other parts, if those costs are low, the company still has an incentive to make more cars to keep the cost-per-car down.

Infiniti looking for a new boss after Christian Meunier leaves to lead Jeep

Nissan's premium division Infiniti is expected to announce a new acting global chief for the brand, the company said, after its current head, Christian Meunier, left to lead the Jeep unit of Fiat Chrysler Automobiles. Nissan's chief quality officer Christian Vandenhende will oversee Infiniti's global operations effective immediately, until a new brand chief is named, Infiniti said in the statement on Tuesday. Meunier, 51, was named Infinit's global chief in early January after its previous boss Roland Krueger left the Hong Kong-based brand. Meunier will take over as global president for SUV-focused Jeep effective immediately, Fiat Chrysler said in a separate statement. Fiat Chrysler CEO Mike Manley had been running Jeep until he was elevated to the top job in July after the death of Sergio Marchionne. Meunier has international experience from his years with Ford, Land Rover, Nissan and Infiniti, which may prove valuable as Jeep attempts to expand overseas with a lineup of new products including the Gladiator pickup, a Wrangler plug-in hybrid, and the revived Wagoneer and Grand Wagoneer nameplates. He's worked mostly in sales and marketing roles, including as senior vice president of sales, marketing and operations for Nissan North America; chairman of Nissan Canada; and his recent role heading up Infiniti. An Infiniti spokesman said Meunier's resignation was not related to Nissan's internal investigation into its former leader Carlos Ghosn.