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.

Fiat 500L recall

FIat-500L-Web

Chrysler Group has announced it will recall an estimated 29,500 2014 and 2015 Fiat 500L vehicles shipped in the U.S. and Canada to replace their knee airbags. Of the total, an estimated 25,500 are in the U.S. with the other 4,000 in Canada. Based on U.S. sales reported through the end of June, the recall appears to cover all of the 500Ls sold or shipped since the model went on the market....

2015 300 spotted

Robert C. Evans wrote, “I caught these right outside my office this morning. It appears to be an updated 2015 Chrysler 300, with a much larger front grill than the current generation. It seems it is almost returning to the original 300 grill and squared off front end. You will also see integrated exhaust in the rear much like the 2015 Chrysler 200.” Most of the sheet metal should be similar to the current version, as the 2015 will be a relatively minor refresh — except for the use of eight-speed automatics across the board and UConnect upgrades....

Hellcat ring-tones

If you can’t afford $60,000 or more for the real thing, or the insurance surcharges for driving a 707 horsepower car (even if you promise to use the 500-hp black fob), Dodge will help out by providing a Hemi Hellcat ring-tone for your phone. The ringtone can be heard and downloaded from  www.drivesrt.com/hellcatringtone. Deeper looks: 2015 Challenger SRT: Hellcat and 392 2015 Dodge Challenger Hellcat at the track HellCat: supercharged Hemi engines...

Categories: Chrysler, Fiat and Fiat Brands.


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