Chrysler, Dodge, and Jeep news from Allpar

Chrysler cash off limits

As Chrysler has built up an enviable record of month-over-month sales increases and steadily growing profits, it has also been building up its cash. At the moment, its cash, cash equivalents, and available credit lines amount to about $13 billion; money for expanding production, developing new products and hiring new workers.

In the first half of 2012, Chrysler spent an estimated $1.9 billion on product development and upgrading facilities, 58% more than it did in the first six months of last year.

Contrast that with Fiat: caught in the downward spiral of the European market, Fiat desperately needs new product, which means plant upgrades and money for engineering, tooling and training. On the other hand, Fiat has to conserve cash.

While Fiat Group reported $440 million in profits yesterday, it was all Chrysler. Without the contribution from Auburn Hills, the Italian side of the house lost $302 million.

Fiat has reduced its cash burn by idling plants and postponing fresh vehicles like the new Punto. It also was able to save a significant amount of money last year by closing the Termini Imerese plant on the island of Sicily.

Fiat is not hurting for money at the moment. Its holdings in cash and credit are higher than Chrysler’s: nearly $15 billion. But it can’t operate in the red long term and it can’t touch Chrysler’s money.

Unlike what happened in when Juergen Schrempp created the “merger of equals” and absorbed Chrysler Corporation’s multi-billion-dollar nest egg, Fiat is legally barred from using Chrysler cash for its own operations.

When the deal was struck for Fiat to assume control of Chrysler in 2009, the U.S. and Canadian governments added a condition that sequestered the American automaker’s cash. When Sergio Marchionne put together the financing deal that allowed Fiat to repay its government loans, a similar condition was included in the package.

Until the loans are repaid or renegotiated, “firewalls are up,” as Marchionne said during yesterday’s conference call with analysts.

While the situation possibly makes for perilous times for Fiat, it also means Chrysler gets to build up and retain the resources necessary to ensure its own future.

Auctioning the first Hellcat

Stryker Red Challenger Hellcat #1

Dodge will auction the very first production 2015 Dodge Challenger SRT Hellcat, the most powerful and fastest muscle car ever built, during the Barrett-Jackson Las Vegas 2014 auction on September 27 in Las Vegas. Proceeds will benefit the not-for-profit Opportunity Village.  The special-edition 2015 Dodge Challenger SRT Hellcat, with a 6.2-liter supercharged HEMI® V-8 engine and 0001 vehicle identification number (VIN), has an NHRA-certified quarter-mile time of 10.8 seconds at 126 mph....

July sales forecasts

Dart-Crystal-Ball

While sales numbers won’t be released until a week from today and even though there’s one more selling weekend in the month, industry analysts have already issued their forecasts for July light vehicle sales. Edmunds.com, Kelley Blue Book’s kbb.com, and TrueCar.com all see Chrysler Group reporting the highest growth of the top automakers with sales more than 20% higher than they were in July 2013, a month where Chrysler temporarily fell to fifth in the volume rankings, outsold by American Honda....

Wrangler: aluminum and/or hybrid?

As government rules get tighter, and to avoid losing customers if/when gas prices rise, automakers are trying to increase gas mileage. At Chrysler, Ram has been slashing fuel consumption by cutting parasitic losses, using eight-speed automatics, and spreading diesels to the 1500 line. Jeep is busily creating the new Wrangler, with an eye towards saving weight, and Chrysler has been advertising for a senior buyer for large aluminum castings....

No FCA-PSA Peugeot merger talks (either)

Mad-Scientists-Blackboard-Web

The slow week for Fiat news has journalists scrambling again. Thursday’s Financial Times reported that Fiat-Chrysler and PSA Peugeot have discussed a merger. Unlike the story in Manager Magazine about a possible FCA-Volkswagen tieup, the Financial Times said “people familiar with the talks” were fairly straightforward: the automakers did have discussions but nothing progressed beyond that point....

Categories: Chrysler, Fiat and Fiat Brands.


ARCA-McInTosh-Dodge-Web
Friday racing results
Ram-2014EcoDiesel-Web
Ram 1500 weight close to 2015 Ford?
Stryker Red Challenger Hellcat #1
Auctioning the first Hellcat
Dart-Crystal-Ball
July sales forecasts


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