Auto Outlook: (Who would have thunk it) Chrysler out-earning Italy's Fiat

By AL SWANSON, UPI Auto Writer  |  Aug. 5, 2012 at 5:30 AM
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Fiat-Chrysler Chief Executive Officer Sergio Machionne sent Chrysler employees an e-mail praising their accomplishments in turning the Detroit auto company around and exhorting them to keep up the good work.

"Our accomplishments, made in the face of near universal skepticism, imbue us with confidence going forward," he wrote. "Living through a near-death experience has revealed the depth of courage that exists within our house."

Fiat SpA owns 58.5 percent of Chrysler and plans to acquire 3.3 percent more from the UAW Retiree Medical Benefits Trust. The trust has owned 41.5 percent of Chrysler since it emerged from bankruptcy in 2009. Chrysler has since repaid all of its government bailout loans and could make $1.5 billion this year.

Marchionne has good reason to be free with praise of his American operation. As unlikely as it seems, Chrysler is out-earning Italian industrial giant Fiat, which would have lost $302 million in the second quarter without the plucky Chrysler's $436 million in profit.

Chrysler earned $909 million in the first half of 2012.

"This strong performance is directly related to the overhaul of our product portfolio, which continues to receive a sound cadence of accolades from third-party organizations and the media," Marchionne wrote.

The re-energized Chrysler is making money selling Jeeps, full-size sedans like the Chrysler 300 and trucks, and has even revived its high-performance sports car the 2013 SRT Viper. But Marchionne acknowledges he needs a hit with the Dodge Dart, the first car based on shared Fiat and Chrysler technology since Fiat took control of the company. The all-new, compact Dart, made at the Belvidere Assembly Plant in northern Illinois, is built on a Fiat platform.

While Fiat loses market share in Europe, Chrysler remains on a roll. And while Chrysler adds workers and shifts to meet demand, Marchionne has assured investors he will not use Chrysler's growing pile of cash to bail out Fiat.

During a conference call with industry analysts, the Fiat-Chrysler CEO said: "Firewalls are up; (Fiat) can't get to it," the Detroit Free Press reported Wednesday. Marchionne said Fiat had $14.9 billion in cash compared to Chrysler's $13 billion in cash and credit.

When Fiat bought its chunk of Chrysler in 2009, one of the conditions for getting U.S. and Canadian government loans was a promise to keep the two company's finances separate.

"No matter how much you earn in Chrysler, you cannot get a hold of that cash," Credit Suisse analyst Erich Hauser told the Free Press. But those restrictions could be changed if Fiat ever takes full control of Chrysler.

Fiat is not alone in facing slow sales in Europe. Peugeot is looking for help from the French government, GM's troubled Opel-Vauxhall unit hasn't made a profit in a decade and resurgent Ford, whose second-quarter earnings declined by 58 percent, said it expects its European operations to lose $1 billion in 2012.

Marchionne's short-term goal is to keep Chrysler cruising along in the United States -- where it sold more than 834,000 vehicles from January through June -- while building Fiat Chrysler into a global brand that can sell 6 million vehicles worldwide by 2014.

Some industry experts doubt Chrysler can carry its parent company over the long term, and 18 months of growing sales does not ensure Chrysler's profitability will last forever.

"History teaches that it is easy to develop bad habits during good times," he wrote. "This is no time to cut corners, no time to become undisciplined in our execution, no time to forget how difficult it was to claw our way back to viability."

'Natural' colors next vehicle trend

Don't say goodbye to metallic silver or basic black just yet, but say hello to green, bronze and brown.

The latest trend in automotive colors in North America, South America, Europe and Asia are "natural" colors, international chemical giant BASF says. The company forecasts such earth colors will be nuanced by berry and copper tones.

"Although popular stable colors such as silver, black and white make up approximately 50 percent to 80 percent of current production, there is rich diversity of potential shades that is returning to the market," said Paul Czornji, technical manager for BASF Color Excellence Group in a release. "The increasing inclination of society to celebrate beauty in earth tones and more traditional green and blue hues is the basis of this trend."

Green has lagged in popularity for years with buyers opting for more popular saturated blues and even browns.

BASF head designer in Europe Mark Gutjahr predicts greens, bronzes and emeralds will be the new colors of choice for both automakers and customers.

"Heavy substances, striking surfaces and expressive materials such as wood and stone create a stronger emotional connection to the world we live in," said Corinna Sy, designer at BASF Coatings Europe. "In the automotive world, this means that we can expect more intensive colors and bolder effects. The new colors are expressive, but not blatant, like a good story."

IntelliLink on all Buicks, Ford app maps charging stations

General Motors last week said the electronic IntelliLink infotainment system it debuted on the 2012 Verano will be standard equipment on all 2013 Buick vehicles.

That includes the all-new Buick Encore crossover.

IntelliLink features upgraded voice controls, SiriusXM satellite radio and one-on-one customer support, The Detroit News said.

"Our next generation infotainment customer will demand a higher level of service, support and solutions due to their interactive experience," Brian Sweeney, U.S. vice president of Buick sales and service, said in a statement.

Not to be outdone, Ford is launching a MyFord Mobile app that will help owners of plug-in electric and hybrid vehicles locate the than more than 9,445 public charging stations throughout the country.

Users will be able to get the location of charging stations via MapQuest.

In 2009, there were about 2,500 public charging stations nationwide but the U.S. Department of Energy says that number has nearly quadrupled in the past three years.

NASCAR approves next-gen Sprint Cup cars

NASCAR has approved the Chevrolet SS, Dodge Charger, Ford Fusion and Toyota Camry as next-generation Sprint Cup cars for 2013.

After more than two years of development, these customized race cars only outwardly bear resemblance to the mass-produced sedans you can drive home from a dealer's showroom.

"Each manufacturer is going to build its own doors, fenders, hoods and fronts," NASCAR vice president of competition Robin Pemberton told USA Today. "The roofs are individually different, and the windshields aren't the same. Every bit of the surface is unique to the manufacturer moving forward."

Viewed from afar, though, the vehicles will be recognizable as Chevys, Fords, Dodges and Toyotas.

"We commend the manufacturers and our team at the R&D center on all the hard work they've put into these new cars," he said in a statement. "With all the designs and surface areas of the car now approved, manufacturers can now move forward building the components needed to outfit their cars. The wind tunnel testing we've had with the manufacturers over the past several months has given us the timely and necessary data we need to come to this confirmation."

NASCAR teams will have the 2013 models for testing of bodies and tires at Martinsville Speedway Aug. 7-8, Talladega Superspeedway Oct. 4, Texas Motor Speedway Oct. 9-10 and Kansas Speedway Oct. 18, USA Today said.

The 2013 NASCAR Sprint Cup series kicks off with the Dayton 500 Feb. 24 at Dayton International Speedway in Florida.

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