twintornados Posted July 27, 2015 Share Posted July 27, 2015 (edited) Yahoo article Edited July 27, 2015 by twintornados Quote Link to comment Share on other sites More sharing options...
J-150 Posted July 27, 2015 Share Posted July 27, 2015 Money that Sergio does not have. 2 Quote Link to comment Share on other sites More sharing options...
twintornados Posted July 27, 2015 Author Share Posted July 27, 2015 Now I understand why he wants a merger partner....gotta pay off all those bills somehow..... 2 Quote Link to comment Share on other sites More sharing options...
sullynd Posted July 27, 2015 Share Posted July 27, 2015 How is the buy back number calculated? I wonder what percentage will actually take them up on it? If I had a paid off truck, getting $3k from FCA for it wouldn't mean much to me if I wasn't in a position to replace it. Quote Link to comment Share on other sites More sharing options...
akirby Posted July 27, 2015 Share Posted July 27, 2015 How is the buy back number calculated? I wonder what percentage will actually take them up on it? If I had a paid off truck, getting $3k from FCA for it wouldn't mean much to me if I wasn't in a position to replace it. Purchase price minus depreciation - basically wholesale/trade-in value. Quote Link to comment Share on other sites More sharing options...
Bryan1 Posted July 27, 2015 Share Posted July 27, 2015 This has been going on for several years. The trucks have defective steering parts which they don't have the parts for or cannot fix. Ram guys said it wasn't a problem. Now this. smh. The trucks, which are the company's top-selling vehicle, have defective steering parts that can cause drivers to lose control, and some previous repairs have been unsuccessful. So to get them off the roads, Fiat Chrysler agreed to the buyback, according to the National Highway Traffic Safety Administration. Owners also have the option of getting them repaired, the agency said in documents released Sunday. Also, owners of more than a million older Jeeps with vulnerable rear-mounted gas tanks will be able to trade in their vehicles for more than market value or be paid to get them repaired, the agency said in a statement. The Jeeps' fuel tanks are behind the rear axle and have little to shield them in a rear crash. They can rupture and spill gasoline, setting the vehicles on fire. At least 75 people have died in crash-related fires, although Fiat Chrysler maintains they are as safe as comparable vehicles from the same era. NHTSA has been involved in vehicle buybacks in the past, but never one of this size. A buyback usually happens when a problem is so serious that it can't be fixed and the vehicles need to be removed from service. The buyback and the Jeep trade-ins likely will cost Fiat Chrysler hundreds of millions of dollars or more. Fiat Chrysler Automobiles NV, which is technically based in the Netherlands but includes the Italian and U.S. companies, posted first-quarter net profit of $101 million. http://www.pennlive.com/nation-world/2015/07/sources_fiat_chrysler_to_buy_b.html Quote Link to comment Share on other sites More sharing options...
akirby Posted July 27, 2015 Share Posted July 27, 2015 Ford has a similar issue now with fuel tanks on Ford Edges. They were recalled 8 months ago and some have been parked at the dealer since then with loaner vehicles being provided. They had to go back to the supplier and re-engineer then re-build all these tanks. The new tanks are now starting to trickle in so maybe Ford has it fixed. In that case Ford offered to buy back at least some of the vehicles at FMV with a $2500 extra rebate towards a new Ford. Quote Link to comment Share on other sites More sharing options...
Bryan1 Posted July 27, 2015 Share Posted July 27, 2015 This Ram parts issue has been going on since 2009 when Mike Levine still worked at PUTC. They've had a long time to get these parts fixed. Quote Link to comment Share on other sites More sharing options...
Anthony Posted July 27, 2015 Share Posted July 27, 2015 Crazy. I wonder if they will actually benefit sales-wise from this? They have people coming in getting guaranteed trade-in value ready to spend on a new vehicle (where any trade-in value difference could get eaten up). Then, on top of that....they get to fix and resell the vehicles that get bought back. Quote Link to comment Share on other sites More sharing options...
akirby Posted July 27, 2015 Share Posted July 27, 2015 Crazy. I wonder if they will actually benefit sales-wise from this? They have people coming in getting guaranteed trade-in value ready to spend on a new vehicle (where any trade-in value difference could get eaten up). Then, on top of that....they get to fix and resell the vehicles that get bought back. Oh they'll get more sales, but if they could fix the vehicles in the first place they wouldn't have to buy them back. I doubt they'll be able to resell the buy-backs. Quote Link to comment Share on other sites More sharing options...
Anthony Posted July 27, 2015 Share Posted July 27, 2015 Oh they'll get more sales, but if they could fix the vehicles in the first place they wouldn't have to buy them back. I doubt they'll be able to resell the buy-backs. It says right in the link they are allowed to resell the buybacks after repairing them. Fiat Chrysler said more than 60 percent of the trucks already have been fixed, and the company is allowed to repair and resell the trucks it buys back. Quote Link to comment Share on other sites More sharing options...
akirby Posted July 27, 2015 Share Posted July 27, 2015 It says right in the link they are allowed to resell the buybacks after repairing them. Missed that. So if they're fixable why are they forcing them to buy them back? I don't understand. Quote Link to comment Share on other sites More sharing options...
twintornados Posted July 27, 2015 Author Share Posted July 27, 2015 Missed that. So if they're fixable why are they forcing them to buy them back? I don't understand. So that RAM can show a sales increase?? Quote Link to comment Share on other sites More sharing options...
Anthony Posted July 27, 2015 Share Posted July 27, 2015 (edited) Missed that. So if they're fixable why are they forcing them to buy them back? I don't understand. Why do you think FCA agreed to this? It's a win-win for both entities. It makes the NHTSA look like they are coming down hard, but in reality FCA is going to benefit from this (or at very least.... not go BK because of it). Edited July 27, 2015 by Intrepidatious Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted July 27, 2015 Share Posted July 27, 2015 (edited) Why do you think FCA agreed to this? It's a win-win for both entities. It makes the NHTSA look like they are coming down hard, but in reality FCA is going to benefit from this (or at very least.... not go BK because of it). They agreed to this because it was cheaper than litigating and losing. Don't for a minute assume that FCA is happy about having to arbitrate thousands of buyback requests, pay dealers to repair, said vehicles, remarket them, and continue to be liable for defective parts/bad repairs on the resold buybacks. AND they have to publicly acknowledge that they did a terrible job at everything recall related for years. There's no 'win' here for Chrysler. They're carrying a larger fine than GM, they're going to draw all sorts of scrutiny for a defect that has killed dozens--yet slipped below the mainstream radar--and their entire recall operation is now basically run by the NHTSA. I just don't understand how people at FCA let their relationship with the NHTSA deteriorate to this level. Did people who were fighting and refusing to comply w/NHTSA requests think that this would end well? Did you have Sergio execs--or Sergio himself--refusing to authorize prudent measures suggested by career Chrysler employees who knew better? Edited July 27, 2015 by RichardJensen Quote Link to comment Share on other sites More sharing options...
Anthony Posted July 27, 2015 Share Posted July 27, 2015 These were recalls, they were required to pay dealers to fix them regardless of this ruling. ...and let's be real, publicly acknowledging any wrongdoing is only as strong as the public's memory....which is mighty short. Was FCA wrong? Hell yes! ...and I think the punishment could have (and should have) been stronger. This is a slap on the wrist compared to what they could have received. Don't think for second this was not negotiated long and hard. Quote Link to comment Share on other sites More sharing options...
akirby Posted July 27, 2015 Share Posted July 27, 2015 They won't be able to sell the used ones for any more than they paid, plus they have to process all that paperwork, payments, etc. And there is no guarantee that the owner will opt to buy a new Ram to replace the old one. If they want to get rid of it so bad they sell it back to FCA after enduring multiple repair attempts I'd say it's quite likely the majority of those owners go somewhere else. I doubt there will be much of a sales increase. Quote Link to comment Share on other sites More sharing options...
Anthony Posted July 27, 2015 Share Posted July 27, 2015 (edited) Clarification of scope of remedies: http://www.media.chrysler.com/newsrelease.do?id=16869&mid= July 27, 2015 , London, UK - Certain press reports have misconstrued the scope and therefore the estimated costs of certain remedies contemplated by the consent order entered into by FCA US with NHTSA and announced today. FCA intends to clarify the scope of such remedies.In the consent order, FCA US has agreed to additional remedies for three recall campaigns covering approximately half a million vehicles, primarily 2008 through 2012 chassis cab, 2009 through 2011 light duty and 2008 through 2012 heavy duty Ram Trucks. In each of those campaigns, FCA US will offer to owners whose vehicles have not yet been remedied, as an alternative remedy, to repurchase those vehicles at a price equal to the original purchase price less a reasonable allowance for depreciation plus ten percent. However, customers responding to the recall may continue to keep their vehicles and have them repaired in accordance with the original recall. As of this date, repairs have been completed on well over 60% of the subject vehicles, leaving less than two hundred thousand eligible vehicles. As is expressly provided for under the consent order, FCA intends that any vehicles repurchased will be remedied and resold. In addition, FCA US is offering consumer incentives to encourage owners of vehicles subject to the structural reinforcement campaign to participate in the campaign. With respect to the 1993 through 1998 Jeep Grand Cherokee ZJs, FCA US is also offering to increase the trade-in allowance to be applied to the purchase of another FCA product, service or parts for those owners of these very old vehicles who would prefer this alternative over the installation of a trailer hitch. All premiums paid to repurchase vehicles in the three recall campaigns and customer incentives will be applied as credits to the $20 million that FCA US has agreed to spend on industry outreach amounts included in the $105 million referred to in the consent order. While such amounts may exceed the $20 million, contrary to certain reports, FCA US does not expect that the net cost of providing these additional alternatives will be material to its financial position, liquidity or results of operations. Anyone who already had the recall is ineligible. Anything FCA has to spend for repurchases is begin deducted from the fines. Still think they are getting the book thrown at them? Edited July 27, 2015 by Intrepidatious Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted July 27, 2015 Share Posted July 27, 2015 This is the largest and most comprehensive punishment ever leveled against an automobile manufacturer. The NHTSA will have unprecedented control over FCA's operations. Trying to spin this as a "win-win" because it could've been worse is absurd. Quote Link to comment Share on other sites More sharing options...
akirby Posted July 27, 2015 Share Posted July 27, 2015 And anyone wanting a new truck could have already traded in their old one, so this is no more of an incentive. Either way they're only getting trade-in value. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted July 27, 2015 Share Posted July 27, 2015 A company that turned a profit of only $101M in the previous quarter is assuring us that they do not expect additional costs from these recalls to be 'material'. Dude. When you're margins are that narrow, buying donuts for the break room is material (okay, I exaggerate a bit, but.....) Quote Link to comment Share on other sites More sharing options...
Anthony Posted July 27, 2015 Share Posted July 27, 2015 This is the largest and most comprehensive punishment ever leveled against an automobile manufacturer. The NHTSA will have unprecedented control over FCA's operations. Trying to spin this as a "win-win" because it could've been worse is absurd. Win-win was admittedly strong wording. But the bark of this ruling is way worse than it's bite. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted July 27, 2015 Share Posted July 27, 2015 Win-win was admittedly strong wording. But the bark of this ruling is way worse than it's bite. They've got an "independent" monitor chained to them for the next three years--or four if the NHTSA wishes--which they have to pay for out of pocket and who effectively works for the NHTSA. The guy has a mandate to spend the next three years digging up dirt on Chrysler at Chrysler's expense, and if Chrysler refuses to cooperate, then they have to get out their checkbook and start forking over even more money. Go down the line. Ask GM, Honda or Toyota if they'd rather swap their recall settlements w/FCA's. Quote Link to comment Share on other sites More sharing options...
bzcat Posted July 27, 2015 Share Posted July 27, 2015 (edited) This is FCA (actually, started during the Hedge fund era Chrysler) not understanding the regulatory environment changed in 2008. [note: not a political post] NHTSA was neutered under the Clinton and Bush administrations, which favored letting car companies do what they wanted on "voluntary campaign" with very little push to recall anything. NHTSA was headed by rotating troop of ex-auto industry hacks that prioritized industry concerns over consumer protection. Then 2008 happened, and NHTSA got its teeth back. Other car companies read the tea leaves better (e.g. Toyota) and began cooperating and ordering massive voluntary recalls that they would never do before. Chrysler had (in my opinion) inferior Govt relations professionals and bush league legal consul and continued to fight NHTSA on everything. And 7 years later, this is all ending very badly for them. Edited July 27, 2015 by bzcat Quote Link to comment Share on other sites More sharing options...
Anthony Posted July 27, 2015 Share Posted July 27, 2015 They've got an "independent" monitor chained to them for the next three years--or four if the NHTSA wishes--which they have to pay for out of pocket and who effectively works for the NHTSA. Who FCA gets to choose (the NHSTA has to approve). I don't buy that it much heft behind it. Every single part of this ruling has a caveat. Heck even the part of the Grand Cherokee portion is only for trade-ins on FCA vehicles. Quote Link to comment Share on other sites More sharing options...
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