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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.

FCA recalls 15k Grand Cherokees, Durangos over brake issues

The Basics: Fiat Chrysler Automobiles is recalling 14,768 examples of the Jeep Grand Cherokee and Dodge Durango, both from the 2015 and 2016 model years, and built between December 9, 2015, and January 14, 2016. The Problem: The left front brake caliper on some vehicles may have been made from the wrong type of iron, and could be prone to crack. A cracked brake caliper may not function properly. Injuries/Deaths: None reported. The problem was discovered by the automaker during testing. The fix: Dealers will need to check the casting date of the component in question, and if necessary, replace the brake caliper. The schedule for carrying out the recall service has yet to be outlined. If you own one: Expect to hear from the manufacturer to arrange an appointment with your local dealer. Related Video: RECALL Subject : Front Left Brake Caliper May Break Report Receipt Date: MAR 23, 2016 NHTSA Campaign Number: 16V168000 Component(s): SERVICE BRAKES, HYDRAULIC Potential Number of Units Affected: 14,768 Manufacturer: Chrysler (FCA US LLC) SUMMARY: Chrysler (FCA US LLC) is recalling certain model year 2015-2016 Jeep Grand Cherokee and Dodge Durango vehicles manufactured December 9, 2015, to January 14, 2016. In the affected vehicles, the left front brake caliper may crack due to being made from an incorrect material. CONSEQUENCE: A cracked brake caliper may lengthen the distance needed to stop the vehicle and increase the risk of a crash. REMEDY: Chrysler will notify owners, and dealers will inspect the front left brake caliper and depending on its casting date, replace it, free of charge. The manufacturer has not yet provided a notification schedule. Owners may contact Chrysler customer service at 1-800-853-1403. Chrysler's number for this recall is S16. NOTES: Owners may also contact the National Highway Traffic Safety Administration Vehicle Safety Hotline at 1-888-327-4236 (TTY 1-800-424-9153), or go to www.safercar.gov.

2019 Jeep Cherokee and Cherokee Trailhawk spotted in Pittsburgh

The current Jeep Cherokee debuted for the 2014 model year, meaning it's about due for a refresh. When it was revealed, the controversial styling and front-wheel-drive-based platform caused a stir among the Jeep crowd. While there isn't much Jeep can do about the platform at this point, it seems the automaker's designers have a much more traditional refresh in the works. Thanks to Autoblog readers Matthew Young and Mike Bothwell, we have a new batch of spy shots, include a couple of the new Cherokee Trailhawk. The refreshed Cherokee looks to crib quite a bit from the new Jeep Compass. Rather than splitting the front lighting like before, the driving lights, headlights and turn signals are all one unit. The whole fascia seems to be a bit more upright than before, though the grille is still canted backward. Out back, the Cherokee gets new taillights that feature clear lenses, again similar to the Compass. The rear bumper gets a mild refresh, too. The reflectors move up, and the Trailhawk's exhaust looks like it moves further inward. One of the Cherokees seems to have a crushed pipe, suggesting some unlucky engineer had a mishap. The red tow hook looks to be in about the same place. No word on when the Cherokee will go one sale, but expect some news as soon as the Detroit auto show in January. Related Video: Featured Gallery 2019 Jeep Cherokee Spy Shots Image Credit: Matthew Young Spy Photos Jeep Crossover SUV