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Fiat Chrysler's profit boosted by Ram and Jeep in North America

MILAN/DETROIT — Fiat Chrysler took the market by surprise by sticking to its full-year profit guidance on Wednesday after a strong performance from its Ram pickup truck in North America helped it defy an industry slowdown. Chief Executive Mike Manley, in FCA's first earnings release since a failed attempt to merge with France's Renault, also left the door open to that or other deals. "We are open to opportunity," Manley said on a call with analysts. "I have no doubt why there still would be interest in it," he added, when pressed on what it would take to revive talks with Renault. Manley declined to comment further. FCA last month abandoned its $35 billion merger offer for Renault, blaming French politics for scuttling what would have been a landmark deal to create the world's third-biggest automaker. Manley said a merger was not a must-have and Fiat Chrysler's business plan was strong. The company said it remained confident its adjusted earnings before interest and tax (EBIT) would top last year's 6.7 billion euros ($7.5 billion). Given disappointing forecasts from other automakers this earnings season, FCA's confirmation of the outlook sent Milan-listed shares in the Italian-American automaker, whose other brands include Jeep, up over 4%. A broad-based auto sales downturn has rattled the sector, forcing FCA's competitors — including Renault, Daimler and Aston Martin — to cut their sales forecasts after second-quarter results, while U.S. carmaker Ford gave a weaker-than-expected 2019 profit outlook. Japan's Nissan, a long-term partner of Renault, said it would cut 12,500 jobs by 2023 after its earnings collapsed. In the second quarter FCA's adjusted EBIT totaled 1.52 billion euros, versus analysts' expectations of 1.43 billion euros, according to a Reuters poll. FCA's U.S. shipments were down 12% in the second quarter but the group said that the successful performance of its Ram brand resulted in an enhanced share of the large pickup truck market of 27.9%, up 7 percentage points from last year. Adjusted EBIT margin in North America rose to 8.9% from 6.5% in the first quarter, thanks to strong demand for the heavy-duty Ram and the new Jeep Gladiator pickup. Chief Financial Officer Richard Palmer also said FCA expected to report up to 10% margins in the region in both the third and fourth quarters.

2019 Jeep Cherokee First Drive Review | Still the most truck-like crossover SUV

The history of the SUV has been one of ever-increasing refinement, and that arc bends towards carlike forms. It's a trend that even the hardiest of nameplates has succumbed to, including the venerable Cherokee, which for 2014, moved from the solid-axle brick of yore to the shark-nosed, independently suspended crossover of modern-day. That wasn't necessarily a bad thing. We found it to be quite a competitive machine at the time, and one that was plenty capable. But time marches on, and five model years later, Jeep has updated the Cherokee. The polarizing shark nose has been toned down, with all the headlight elements integrated into single units on either side. The hatchback has been revised and now sports a cutout for the license plate. Besides improving the looks at the back, Jeep says it allowed them to expand the rear cargo area to 25.8 cubic feet, an increase of 1.2 cubes, because moving the license plate space allowed them to pull the latch assembly farther out. It should be noted, though, that the Cherokee still doesn't have as much cargo capacity as the new 27.2-cubic-foot Compass. Besides the cosmetic changes, the new Cherokee gets a new engine, a 2.0-liter turbocharged four-cylinder good for 270 horsepower and 295 pound-feet of torque that shares commonality with the Jeep Wrangler and Alfa Romeo Giulia engines. However, it lacks the mild hybrid technology of the Wrangler because of space issues, and it has a cylinder head with two camshafts rather than the Alfa's single-overhead cam design. In addition to the new 2.0-liter turbocharged engine, the Cherokee's old naturally aspirated engines, a 2.4-liter four-cylinder (180 hp, 170 lb-ft) and a 3.2-liter V6 (271 hp, 239 lb-ft), carryover unchanged except for the addition of standard engine start-stop functionality. The question is, can mild changes to the Cherokee keep it competitive in a segment where several rivals have been completely redesigned? In terms of capability, the answer is a resounding, "yes," particularly for the Trailhawk, which in turbocharged guise, has even shorter gearing for its low-range four-wheel-drive setting than before at 51.2:1. Like the previous model, the Trailhawk includes different front and rear bumpers for improved clearance and approach and departure angles. It features a set of skid plates and gets a steel oil pan for protection from obstacles, and the rear axle can be locked for additional traction.

EPA suspected Fiat Chrysler of using 'defeat device' in 2015

U.S. regulators told Fiat Chrysler Automobiles in November 2015 that they suspected some of the automaker's vehicles were equipped with secret software allowing them to violate emission control standards, according to emails disclosed on Friday. The U.S. Environmental Protection Agency and California Air Resources Board accused Fiat Chrysler in January of using the software, known as a "defeat device," to illegally allow excess diesel emissions in 104,000 Jeep Grand Cherokees and Dodge Ram 1500 trucks built between 2014 and 2016. Byron Bunker, director of the EPA's Transportation and Air Quality compliance division, said in a January 2016 email to Fiat Chrysler, obtained by Reuters under the Freedom of Information Act, that he was "very concerned about the unacceptably slow pace" of the automaker's efforts to explain high nitrogen oxide emissions from some of its vehicles. Nitrogen oxide is linked to smog formation and respiratory problems. Bunker's email said the EPA had told Fiat Chrysler officials at a November 2015 meeting that at least one auxiliary emissions control device on the car maker's vehicles appeared to violate the agency's regulations. Mike Dahl, head of vehicle safety and regulatory compliance for Fiat Chrysler's U.S. unit, responded in a separate email that the company was working diligently and understood the EPA's concerns. He added that if the EPA identified Fiat Chrysler vehicles as containing defeat devices it would result in "potentially significant regulatory and commercial consequences." The documents redacted the vehicles named, but two officials briefed on the matter said they referred to diesel models. The EPA's November 2015 meeting with Fiat Chrysler came two months after Volkswagen AG, mired in a major tailpipe emissions scandal, admitted to installing secret defeat device software in hundreds of thousands of U.S. diesel cars to make them appear cleaner than they were on the road.