How The Feds Are Babysitting Fiat Chrysler From Now On

Illustration for article titled How The Feds Are Babysitting Fiat Chrysler From Now On

Good Morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know.


1st Gear: And They Better Behave Themselves Too

The National Highway Traffic Safety Administration is making Fiat Chrysler pay a record $105 million in civil penalties over the myriad ways they mishandled recalls. They also have to buy back 180,000 Ram trucks from customers. But wait, there’s more, including three years of oversight from an “independent monitor” who reports to NHTSA but they must pay for. From Automotive News:

The deal, announced Sunday evening by the U.S. Department of Transportation, requires that Fiat Chrysler overhaul its recall processes under close oversight from the NHTSA-approved monitor, or face as much as $15 million in additional penalties. It also commits the company to spending at least $20 million on a variety of outreach efforts to consumers and other manufacturers to reinforce the importance of safety compliance and boost response rates for recalls. FCA said buybacks are included in the $20 million.

The full details on the agreement can be seen in that story, but Fiat Chrysler will be under heavy scrutiny for some time.

2nd Gear: The Expensive Pickup Trucks Worked!

Ford today announced their Q2 profits for 2015 hit $1.9 billion, up 44 percent from last year and their best profits since 2000. Thank margins for that — while the new F-150 is limited in supply, it’s more expensive and thus more profitable. One more from Automotive News:

At the same time, Ford has significant pricing gains in its favor. Average transaction prices for the F-series, including both the F-150 and Super Duty, rose $3,700 in the first half of the year, to $44,000. Ford last week announced a new “Limited” version of the F-150 that’s expected to cost at least $60,000.

Shanks said incentives on the F-150 were the lowest in the segment, despite widely publicized discounts offered on “selected vehicles in selected markets.” Ford achieved those pricing gains even though it built about 25,000 fewer F-150s in the first half of 2015 than it did a year ago, he said.

“Right across the board, F-150 is fine, building momentum and clearly is going to help us push toward a stronger second half,” Shanks said. “This thing is really going to continue to perform like a rocket.”

Like a rocket!

3rd Gear: VW Passes Toyota

Good news for the Volkswagen Group: for the first time ever, they passed up Toyota in global sales. From the Associated Press:

Japanese automaker Toyota Motor Corp. said Tuesday it sold 5.02 million vehicles in the first six months of this year, down 1.5 percent from the same period the previous year, as sales struggled especially in the languishing Japanese market.

Volkswagen AG said earlier this month that it sold 5.04 million vehicles during the same period. Sales were robust in Europe and North America but fell in China, usually a strong market for the company. Its first-half sales were 0.5 percent down from the same period in 2014.


General Motors is expected to report their sales figures on Thursday. It’ll be interesting to see where they come out too.

4th Gear: $5 Billion For GM Vehicles In Emerging Markets

Speaking of GM, they’re about to invest a lot of money for a new family of platforms designed for emerging markets like China, Brazil, India and Mexico, but not Europe or the U.S. They will replace several existing cars. From The Detroit News:

The first vehicle — one of possibly a few dozen — is slated to roll out in the 2019 model year. GM expects to eventually sell more than 2 million of the new vehicles per year.

GM President Dan Ammann would not say Monday what current sales volume is for the vehicles that will be replaced. But he said GM expects “meaningful growth” over today’s sales rate, with expected growth in the markets over time and with GM’s “superior entries” improving competitiveness.


The architecture and engines will be developed with GM’s Chinese partner, SAIC Motor Corp. Ltd.

5th Gear: Can The iA And iM Bring The Masses To Scion?

Scion’s struggles are well-documented at this point, and much of that can be traced to a lack of product. That’s why they need the iA subcompact sedan, a re-badged Mazda2, and iM hatchback to be big hits. From The Detroit Free Press:

Twelve years after Scion launched its first vehicles, the xA and xB, the millennial-focused brand is struggling to hit the 100,000-per-year U.S. sales goal it set for itself. Through the first half of 2015, Scion sales were 24,931,down 18.6% from the year earlier period.

Currently dealers offer the sporty FR-S coupe, the less expensive tC couple and the boxy wagon-like xB. The two models each offer more doors — the iA is a sedan, while the iM hatchback actually offers a fifth opening in the rear.

Some buyers may see them as slightly more mainstream than the quirky models that defined Scion’s first decade.

“When they first came to us with a sedan for Scion I thought, ‘OK, how is it going to play out?’,” said Doug Murtha, vice president of the Scion division. “But as the vehicle took shape, I felt like there is enough dynamism in this vehicle that it’s not the traditional econo-box.”


The story calls the iM a crossover, but I’ve seen it and it’s not (even though the lines between crossovers and hatches/wagons are extremely blurry these days.) It’s still kind of mind-boggling Scion doesn’t have a real small crossover in their lineup though.


Reverse: Tazio!

The Italian race car driver Tazio Nuvolari wins the greatest victory of his career in the Grosser Preis von Deutschland (German Grand Prix) held on the Nurburgring racetrack in Nurburg, Germany on this day in 1935.


Neutral: Will More Oversight Fix Fiat Chrysler?

Or is this just NHTSA flexing its muscle after their own audit made them look not so great?


Contact the author at


Urambo Tauro

The Expensive Pickup Trucks Worked!

Why does this news smell like “we’re making so much money off of people who buy these things!”? I’m sure those profit margins impress Ford’s investors, but it’s insulting to the rest of us who can’t quite afford them. Sounds like the prices could be lower, and they’d still make a killing. Talk about a wasted opportunity to sell more vehicles.