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Stellantis' production in Italy cut by up to 220,000 vehicles

MILAN — A global crunch in semiconductor supply could cost Stellantis up to 220,000 vehicles this year in terms of lost output in Italy, the FIM CISL union said, adding this would mark the fifth year in a row of declining production in the country. FIM CISL said in its periodic report on the group's production in Italy that Stellantis produced 351,890 vehicles in the first half of this year, almost 14% less than in the same period last year, with the key Melfi plant and the Sevel van-making facility being the most affected sites. Using data for the first half of the year and potential full-year production based on orders booked, the union estimates Stellantis could lose between 200,000-220,000 vehicles in 2022, said Ferdinando Uliano, the head of the FIM CISL union. "It's as if one of the group's large plants stopped for a year," he said, adding the chip supply situation was not improving this year and would also affect production in 2023. Uliano said factors including the war in Ukraine and the disruption to Russian gas supplies to Europe would only worsen the part supply situation for the automotive industry. A spokesman for Stellantis declined to comment on data and forecasts provided by FIM CISL, but repeated the carmaker had been taking decisions regarding the management of its operations on a day-by-day, plant-by-plant basis since the start of the COVID pandemic. Plants/Manufacturing Fiat Jeep

Fiat Chrysler working on an inline-six to replace the Pentastar V6?

Get out your Skeptics Hat for this one and keep it close by. Allpar cites "reliable sources" to write that Fiat Chrysler appears to be working on a new inline-six engine to be slotted into company products around the globe. The purported engine would be based on the 2.0-liter Global Medium Engine inline-four. Allpar first reported on the potential development in February 2017 and has filed a few updates since then, one citing "internal communications referring to a GME T6" — the "T" meaning turbocharged. It's said that some engineers have changed their online resumes to reflect their focus on the new motor. Apparently, FCA tried adding forced induction to the Pentastar V6 but didn't like the results. The new direction then turned toward a "compact straight-six." In at least one guise, the GME I-6 would come in at just under three liters in order to escape taxes on engines 3.0-liters and above in certain European markets; the 2.0-liter four-cylinder has an actual displacement of 1.995 liters. The present V6 Pentastar comes in 3.2-liter and 3.6-liter guises; a turbocharged 3.0-liter straight-six should be able to replace both as far as output. Hooking up to the company's eTorque system used on the 3.6-liter Pentastar and 5.7-liter Hemi would make things even more punchy. With the trend in truck engine downsizing, it wouldn't be crazy to see such an engine head straight to Ram. The four-cylinder GME unit serves in the Alfa Romeo Giulia and Stelvio, and Jeep Cherokee, Wrangler, and Grand Commander. The big Alfa Romeos and full-size Jeep and Ram models shouldn't have any problem with a longer inline engine. Maserati, which doesn't use the Pentastar engine, could be a candidate as well should it choose to step away from its Ferrari-developed engine cred. Speaking of Ferrari, the Italian brand is working up a new V6 based, in its words, on "a very, very particular architecture." It isn't clear where it will go or if one of the other Italian brands will get access to it, but the Allpar piece says the Ferrari V6 will be based on the core GME architecture for Maserati. Chrysler gave up its last inline-six 11 years ago when the 4.0-liter I-6 retired alongside the JK-series Jeep Wrangler. The engine format is back in vogue, and its reincarnations have received good reviews. But inline-sixes are generally longer, hence FCA's focus on a compact unit, and that could limit the purported engine's placement options.

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.