By on April 26, 2016

2015 Ram 1500 Laramie Crew Cab 4x4 EcoDiesel

Fiat Chrysler Automobiles CEO Sergio Marchionne has a good morning today, after FCA announced boosted profit and earnings spurred by healthy sales in the U.S. and Europe.

First quarter net profits were up from just above the break-even point a year ago to 451 million euros ($539.4 million), according to The Detroit News, with pre-tax earnings up 88 percent to 1.3 billion euros ($1.6 billion).

All regions except Asia-Pacific returned a profit, causing Marchionne to sound very optimistic about what lies ahead.

“We see nothing negative on the horizon,” Marchionne reportedly said on a conference call. “The outlook for the year continues to be strong.”

Sales in Latin America allowed the company to made the switch from red ink to black in that market, but it was North American sales — of Jeep and Ram products, specifically — that made up about 90 percent of the earnings increase.

Though Marchionne sounded sunny today, Fortune quotes a Milan-based trader who questions whether FCA can replicate its Q1 performance in the future, given pressures from the company’s high debt load.

FCA is currently restructuring its U.S. assembly operations in a bid for efficiencies and maximized sales of its biggest money makers.

According to Brent Snavely of the Detroit Free Press, Marchionne confirmed that the company’s Sterling Heights assembly plant will produce the next Ram full-size pickup by 2018 (but not before the layoff of many Chrysler 200 workers this summer), with retooling planned for the Warren plant to aid in Jeep production. Ram production in Warren will be wound down before that time.

Production of a successor to the Jeep Compass/Patriot will go to Toluca, Mexico, with U.S. sales beginning in early 2017.

[Image: FCA US LLC]

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59 Comments on “Fiat-Chrysler Earnings Rise Sharply; Ram Production Coming to Sterling Heights...”


  • avatar
    laserwizard

    Fiat is like a tick on the backside of Ram/Dodge/Chrysler/Jeep – sucking the profits out of them to cover fiat’s awful performance.

    • 0 avatar
      Kyree S. Williams

      But…Fiat also infused much-needed cash, product development, design and engineering into Chrysler. Like I said, they’re far out of the dark days of DaimlerChrysler.

    • 0 avatar
      heavy handle

      You didn’t read the article, did you?

      Besides, anyone who is even vaguely familiar with Chrysler’s corporate history recognizes the pattern: Chrysler stops doing R&D for a few years, runs out of new products, a third party savior comes along (Fiat now, Daimler earlier, AMC/Renault before, Simca in the 70s) with needed tech. New better products come along, and every looser pines for the “good old days” when the corporation was headed straight for disaster.

      • 0 avatar
        SSJeep

        Some would say that Daimler bled Chrysler dry, sapped up Chrysler’s profit with a sponge, inundated the company with less than reliable Mercedes components, then spat out Chrysler to Cerberus Capital for pennies on the dollar.

        Chrysler Crossfire, anyone?

        • 0 avatar
          gtemnykh

          The merc-derived/sourced 5spd automatic is probably the single best thing to happen to Chrysler transmissions since the Torqflite days.

          • 0 avatar
            Fred

            I kind of liked the idea of buying older MB technology/cars on the cheap. Too bad they didn’t make anything I found compelling and that the two didn’t get along. What might of been…

          • 0 avatar
            gtemnykh

            Yeah if the Charger had been slightly more W210 Mercedes-ish and not so brutish/aggressive looking and didn’t have that awful circa 2005 Tupperware-by-Chryco interior, that’d be a rather fetching vehicle. I remember driving a rental SXT of my dad’s back in 2010 or so, it was a very decent driving car with the 3.5L and 5spd powering the rear wheels. But the poor visibility and nasty interior soured the experience. My friend’s Magnum was similar. A good idea and good underpinnings, ruined with poor execution and quality.

        • 0 avatar
          thornmark

          When Daimler bought Chrysler, Chrysler had the highest profit margin of any automaker in the world.

          Or something like that.

          • 0 avatar
            Victor

            Isn’t that a bit of a lore, considering that a) it was never a merge of equals between Daimler and Chrysler and that Daimler infused not only tech but also cash… Profit marvels don’t need cash infusion, right? And b) ever heard of Porsche?

          • 0 avatar
            Flipper35

            They had over $4b cash in had set aside for new developments as well. When Daimler stepped in that all went across the pond.

        • 0 avatar
          Victor

          The Crossfire was the very proof of concept that Chrysler was considered by Daimler to be the second-tier brand to Mercedes, being a previous generation SLK, which itself was never a satisfying product in the first place.

          But Daimler also gave Chrysler the 300 and its platform mates, which to this very day remain the only cars FCA is actually able to sell in decent numbers in the US.

      • 0 avatar
        SC5door

        R&D for new products was in full swing by the time Daimler stepped in and stopped programs in their tracks for cost analysis (IE: cost cut). Hence why the LX was late coming out. It’s why we didn’t see the 300 HEMI C convertible. 3.5L was dropped from the mini-vans. They dropped Plymouth, but expected Chrysler to cover “upscale” and economy at the same time. The Mercedes employee roster became larger but Auburn Hills was all but emptied out—I’m shocked it wasn’t sold out to become a shopping mall.

        Chrysler was shopped out by Eaton to create the “premier automotive company in the world”. Chrysler barely (a laughable amount) had any non North American market share, there was no way in hell that they were going to go that big.

        And when was AMC ever a “savior” to anything?

        • 0 avatar
          heavy handle

          Q: When was AMC ever a “savior” to anything?

          A: When they contributed the LH platform, the Cherokee and the Grand Cherokee. Those cars were massive hits. Chrysler was getting by on K-car derivatives in the late 80s.

          • 0 avatar
            Lorenzo

            Chrysler’s purchase of AMC brought a team of designers who were used to working on a shoestring, and had developed something similar to what the Japanese did, bringing in all departments at the beginning of a project and parting out responsibilities.

            Ford, GM, and Chrysler did just the opposite, bringing in interior, drivetrain, body, electrical, and assembly in stages, after key parameters had already been decided for them without their needed input. The result was a huge group at the end of project development, trying to work out all the conflicts, often with less than optimal results.

            Chrysler profit margins exploded once the AMC team transformed Chrysler’s design, and a steady stream of new models began to appear, on time and within budget. By 1998, the last year of Chrysler independence from Daimler, they built nearly 3 million vehicles (2.4 million in NA) and made a pre-tax profit of $6 billion. From 1995-97 they bought back $5 billion in stock, and had at the merger $12 billion in retained earnings for new product.

            Lee Iacocca made the biggest mistake of his career, choosing ex-GM lifer Bob Eaton as his replacement instead of Maximum Bob Lutz. Eaton promptly sold out the company to Daimler, saving them from the mess made by their own jackass former CEO Jurgen Schrempp. Daimler then drove out the AMC people and trashed the system they’d created, while stealing all the retained earnings and paying off Eaton. Even Lutz bailed out and went to GM.

          • 0 avatar
            ect

            The LH platform was developed by Chrysler, as the successor to the stretched K platform.

          • 0 avatar
            heavy handle

            ect,

            The LH platform is a development of the Eagle (née Renault) Premier. It shares nothing with the K car.

            If you don’t believe me, read the wikipedia entry:

            en.wikipedia.org/wiki/Chrysler_LH_platform

      • 0 avatar
        Roberto Esponja

        AMC/Renault, Simca saviors?

        You high, boy…

        • 0 avatar
          heavy handle

          Roberto,

          So you think that Chrysler created the Horizon, K car, Cherokee, Grand Cherokee and LH out of thin air?

          Is it just a coincidence that AMC and/or Simca just happened to have cars for sale with the exact same layout (and name!) just before Chrysler released them?

    • 0 avatar
      RetroGrouch

      Chrysler is an anti-capitalist prank than actually managed to make a profit recently thanks to cheap gasoline. Their Mercedes based cars are not the typically Chrysler shade of terrible we are used to but Chrysler will have to move on new new platforms in the coming years. I don’t think they can milk 20 year old MB parts bins for much longer. Unfortunately for them, they have a multi-decade history of designing garbage transportation. When gas hits $4/gal in the US, their anti-capitalist nature will take over and I don’t think anyone in the US has the stomach for another automaker bailout.

    • 0 avatar
      Big Al from Oz

      laserwizard,
      It is simple to pass on the judgment you’ve made. But, in reality where would Chrysler and it’s brands be today without FCA involvement?

      What kind of money could of Jeep and Ram attracted with a fire sale if Chrysler folded?

      I do believe that the US government should not support any bailouts of any business. If a business/corporation makes p!ss poor decisions, along with the unions all should either change their ways or lose out.

      • 0 avatar
        SC5door

        While the Australian Government tossed money at Ford for production there. Oh sorry, it’s called an “investment lifeline”.

        • 0 avatar
          Big Al from Oz

          SC5door,
          Which government? Remember Australia is a democracy with the left union supporters and the right corporation supporters.

          In the end we realised it wasn’t a failure to tell the auto manufacturers that if you can’t compete then don’t do business. How is removing a loss making industry an “investment failure”? It isn’t the government that runs business, it’s business, more particularly Amercian business, ie, GM and Ford.

          This proves that these large corporations can’t survive on their own without the taxpayer providing them with a continuous lifeline.

          There was all doom and gloom predicted if the auto industry in Australia upped and move out of the country.

          As I’ve stated this is the best thing to do, move uncompetitive business out.

          So, in the end what occurred here in Australia? We retained the more value added componenets, ie, engineering/design and local management in country and moved the process jobs off shore.

          The taxpayer now doesn’t fork out $2 000 per vehicle made in Australia. The US taxpayer subsidises each vehicle $3 000 that is locally produced.

          Who’s the better? Our GDP has just risen 3% over the previous year.

          • 0 avatar
            DenverMike

            @BAFO – You keep pulling #’s straight out of your butt, but can never back them up. If the subsidy thing was true, you’re talking past tense, and ancient history.

            It’s clear you’re still saddle-sore, GM and Chrysler were saved by taxpayers, while Aussie auto factories will not be saved by anyone.

            The difference is the OZ auto industry was never a sustainable model, and not without tariffs up to 59% at one point. It never should’ve happened in the first place.

            Yeah, with that kind of “protection”, we’d still be building large V8 sedans, along with El Caminos and Rancheros, no different than your soon to be killed off Commodore and Falcon based cars and Utes.

    • 0 avatar
      Victor

      I’m afraid neither the post nor reality condone with that.

  • avatar
    Kenmore

    That is just a beautiful pickup, period.

    Since most pickup buyers just want a giant, cushy-riding 4-dr sedan for hauling the family, why not buy the pretty one that also happens to use coil springs in back?

    How could you ask for better product placement in an environment where pickups are supporting all 3 domestic brands?

    • 0 avatar
      SCE to AUX

      At least FCA is honest about it.

    • 0 avatar
      DeadWeight

      “How could you ask for better product placement in an environment where pickups are supporting all 3 domestic brands?”

      Boom. Drop the mic because this is the beginning, middle and end of any discussion related to cyclical auto industry profitability regarding General Motors, Ford & FCA.

      Just as the Escalade subsidizes the entire Cadillac division, pickup trucks subsidize much of GM, Ford & FCA operations.

      When pickup trucks slow appreciably again on a YoY basis, those facts are laid bare as the tide recedes.

      • 0 avatar
        heavy handle

        Exactly. At least FCA is making a small profit outside of North America.
        GM’s results last week were red all over, except for North America. I doubt much of that NA profit came from anything other than the Silverado. What happens when Americans finally realize that they don’t need to spend $500+ per month on a pickup that’s only useful two or three days a year?

      • 0 avatar
        Kenmore

        Sure it’s palliative and guaranteed to eventually fail.
        What about this country isn’t?
        Or about the lives of half of us commenters?

        “a pickup that’s only useful two or three days a year”

        Do you never drive in the US anymore?

        • 0 avatar
          heavy handle

          I do drive, but I only need a pickup (more often a van) two or three days a year. I get one for $19.95, plus mileage fees and gas. The rest of the year all the stuff I haul fits in a regular car.

          The huge “full size cars” that my parents’ generation drove are gone now; there is no reason to think that pickups will sell like crazy forever. You barely ever see pickups in Europe, and they have just as many plumbers and contractors and landscapers as we do.

          • 0 avatar
            Kenmore

            Oh… you’re European.

          • 0 avatar
            heavy handle

            That’s news to me!

            Are you the type that’s suspicious of anybody who’s traveled outside of your tri-state area? Nothing wrong with that, by the way, just wondering.

          • 0 avatar
            Kenmore

            See that furthest haystack? Are you from beyond that?

          • 0 avatar
            DenverMike

            For every trade that has to have a van, there’s dozens of trades/occupations that can go either way, or can ‘only’ use a pickup.

            Vans are clearly better for some contractors and the rest have a choice to make.

            Vans have obvious advantages, but are mostly ‘one-trick-ponies’. They not so good for hauling the family, shuttling the kids, outings, taking in a show/dinner, etc.

            For showing off, there’s no contest.

            Of course, there’s the “life style” pickup buyers, not unlike cowboys “more hat than horse”. But but “life style” panel van owners are more on the fringes of society.

            Europe does their own thing and hasn’t really had the exposure to pickups like the US. But a large part of the reason we enjoy crazy high resale value on pickups, is Mexico tries to bleed us dry of our used pickups, especially after they’re 10 years old. Vans, not so much.

    • 0 avatar
      Big Al from Oz

      Kenmore,
      I’ve just rented a 5.7 Hemi Ram. I can’t say the vehicle is overly nice. It’s okay, to rent for a short time.

      For such a large and heavy chassis is manages to be quite sloppy in putting it’s power down to the road. Much of this is due to the suspension/chassis tune. In other words the chassis/suspension setup isn’t quite able to match the engine. I would expect the VM diesel/Pentastar to be able to put down the power better.

      On a positive note regarding the suspension/chassis setup was the ride comfort was outstanding, but again it turns like a turd, with the overly soft ride allowing the vehicle to have excessive and unnecessary body roll, even with the level of comfort provided.

      FE was exceptionally poor at 14mpg. On a positive note the engine power and delivery was very good. The transmission shift was not quite acceptable with some graunching at low power when the computer was making a half assed attempt at deciding whether to remain in the current gear or shift up.

      The front seat and steering was poorly matched as was the rotary shifter on the dash. I’m quite tall and I found the rotary shifting mechanism not quite ergonomically placed. Why not just have the shifter in the centre console??

      The seats were a tad unsupportive.

      Visually, the Ram appears to be how a Korean vehicle designer would interpret what a full size US pickup should look like from the front.

      If a score was to be given for the Ram out of 10 points it would receive a 6 from me, which is one point higher than the 2.7 aluminium F-150 would get.

      For the next Ram I do believe FCA/Ram should address what I’ve mentioned above.

      Owning a car is like a selecting a spouse, some might look pretty and go hard, but at the end of the day can you live with it for an extended period of time?

      The Ram, like the aluminium F-150 are one night stands.

      • 0 avatar
        Kenmore

        Stop it.

        Yes, I’ve got huge floor fans and many cans of Febreeze and it’s warm enough to open the windows, but stop it anyway.

      • 0 avatar
        Fred

        Wasn’t that rental a commercial spec?

        • 0 avatar
          Big Al from Oz

          Fred,
          It was a 2015 SLT dual cab with a 5.7 Hemi.

          In all honesty the F-250 SuperDuty I had in Vegas felt more sure footed on the road than the Ram. The only problem was the SuperDuty was way to large.

          Even the Ram is way to large for most. I do think anyone who buys one does so as a sign of middle class status more than anything. We have the same here in Australia with a SUV/CUV alongside a dual cab 4×4 in the driveway.

    • 0 avatar
      Lou_BC

      @Kenmore – “Since most pickup buyers just want a giant, cushy-riding 4-dr sedan for hauling the family, why not buy the pretty one that also happens to use coil springs in back?”

      You comment explains why FCA is in a more precarious a position than Ford or GM. They target the lifestyle buyer. That is a person who buys a truck because he wants one but doesn’t really need one.

      I don’t see Ram 1500’s in fleets ever. I live in town that is a heavy industry hub. Guys who need trucks or companies who need pickups will always buy them. Maybe not as much but they still get purchased. My brother’s company hung on to trucks a few years longer than normal during the 2008 downturn but that meant repair costs and loss of productivity ate up any savings.

      I’m sure that there are fleets out there somewhere that has Ram 1500’s. I doubt they are used in extreme environments. In 2008 when everything tanked in the USA there was a slowdown in my region of Canada. It wasn’t as bad as past ones but it was noticeable. That coupled with record high fuel prices for the next few years saw a large number of “lifestyle” pickups end up for sale. The local repo lots were pretty full and anectdotally most were Ram. I suspect that sleazy local dealership sales practices were partially responsible for that.

      • 0 avatar
        Big Al from Oz

        Lou,
        I would think your comment is ass up.

        Pickups are becoming more and more a car/CUV. So, FCA has made a good move using your analysis.

        How can you screw this up?

      • 0 avatar
        Drzhivago138

        Winona-based Fastenal seems to use RCLB Ram 1500s (4×2 or 4×4) almost exclusively in their fleets, with a few Quad Cabs. They’re the only ones I’ve seen.

      • 0 avatar
        Kenmore

        “They target the lifestyle buyer. That is a person who buys a truck because he wants one but doesn’t really need one.”

        The person I’m judging by needs a truck more than anyone else. She’s the one who now will never put her family in anything lower, smaller or more blinded in traffic than a pickup/SUV. And having a big-box tote welded to the back is better than a third row.

        But I’m only observing local trends where this mom also carries a Glock, Kimber or S&W.

      • 0 avatar
        MrIcky

        Lou

        I see Rams in fleets all the time. I do think there is some ‘regionality’ to it based on the big dealers in the area. Because, really the differences between trucks is sort of splitting hairs.

        Ram seems to be targeting the work buyer pretty hard where I am. I think you’re just applying your personal biases and trying to make it sound objective. Why would a Ram be used in any less extreme environment than any other 1500. And the big diesel Ram may be the best at extreme environment use.

        The BLM uses PowerWagons (which are admittedly 2500s, but with the 5.7 engine) for western rangeland fire fighting utility pickups. I’d argue that there isn’t much tougher duty than that to be had for a pickup.

  • avatar
    Whatnext

    Sergio is being extremely shortsighted leaving Chrysler-Dodge without a small or midsize car. The next time gas prices rise – Boom! And if somebody else is going to build small cars for FCA, who is building small cars for Fiat? I thought that was the whole point?

  • avatar
    eggsalad

    The single-cab RAM and Chevy/GMC trucks are made in Mexico. The single-cab Ford is domestic.

    Will this new FCA plant make single-cab trucks in America, or will they continue to be made in Mexico?

    • 0 avatar
      stuki

      Trucks may be an obsession in Texas, but it’s religion in Mexico. Few Mexicans would knowingly do anything other than a darned good job, building a truck. Ford’s reliance on alu construction may require them to be closer to more specialized suppliers, but any notion that a domestic workforce will do a better job than a Mexican one at building trucks, seems pretty unfounded.

    • 0 avatar
      DenverMike

      Ram is huge in Mexico, 2nd only to F-series, but the single cabs of all pickup brands are the biggest selling ‘cabs’ in Mexico anyway, so I’m sure Ram will continue with production of single cab Rams down there.

      Of course we’re talking 1/2 ton Rams, as production of all US ‘sold’ 3/4 ton Rams (and up) in all cab configurations, will also continue in Mexico.

  • avatar
    Pig_Iron

    I just hope they have something better than that crazy frame flip sling station that they had at Warren Truck. That was pretty precarious.
    =:-O

  • avatar
    npaladin2000

    Gee, maybe sweater-guy actually knows what he’s doing.

  • avatar
    LD

    With a lot of FCA production in Canada which is exported to the US, I wonder how much the fall in the C$ vs the US$ has helped this increase in profit?

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