Marchionne: FCA will cooperate with feds’ requests; says no all-aluminum Wrangler
Detroit — Amid federal scrutiny, the CEO of Fiat Chrysler Automobiles NV on Tuesday defended the safety of the company’s vehicles and recall campaign efforts.
“We have done and continue to do a phenomenal amount of work to ensure that we make our cars safe, as safe as when can,” Sergio Marchionne said following a SAE Foundation award event in Detroit. “ ... We respond to any recall initiatives in an efficient fashion.”
Marchionne’s comments come a day after the National Highway Traffic Safety Administration (NHTSA) announced a July 2 public hearing regarding concerns about the automaker’s handling of 20 recall campaigns covering more than 10 million vehicles since 2013. It issued an order compelling the automaker to answer detailed questions about its performance in recalls.
Fiat Chrysler, Marchionne said, will work with federal officials and comply with requests about the recall campaigns in question. The recalls range from vehicles no longer produced, such as the Dodge Dakota and Chrysler Aspen for defective axles, to 2013-14 Dodge Viper door latches. The company must respond by June 1.
Marchionne said he will not testify as part of the July hearing.
NHTSA Administrator Mark Rosekind on Monday said the agency has “significant concerns” about the automaker’s performance in efforts to fix the recalled vehicles. Marchionne said many of the campaigns in question are at or above the industry’s average regarding completion rates on recalled vehicles. He said he cannot “force customers” to get their recalled vehicles repaired.
Marchionne cited the “real issue” surrounding the industry’s ongoing recall crisis a “new phase” of stricter and changing regulations from NHTSA.
“We need to work with the agency in a very cooperative and open way to make sure that we can meet their requirements for their new stance,” he said. “We have no option but to comply with their requirements and we will. I have nothing to hide in this process. I just want clear rules.”
Fiat Chrysler and NHTSA have been at odds for years about recalls, most publicly about 2.7 million older-model Jeeps that NHTSA said are linked to dozens of fatalities following fires after rear-end crashes.
Fiat Chrysler has said the vehicles in question met or exceeded all federal safety standards when they were produced.
“I want clarity,” Marchionne said. “Clarity, we’ll comply. It is that simple. We can’t change our mind after the fact. We can’t change the rules after the events. We can’t invent safety standards that didn’t exist at the time.”
The company reluctantly recalled an estimated 1.56 million 2002-07 Jeep Liberty and 1993-98 Jeep Grand Cherokee SUVs for the rear-end collision problem in June 2013. It also agreed to conduct a customer service campaign for 1.2 million 1999-2004 Grand Cherokees.
NHTSA and recalls were just two of many issues Marchionne, the longest-active automotive CEO, addressed during an extended conversation with reporters after receiving the 2015 Industry Leadership Award at the SAE Foundation event at the Masonic Temple in Detroit.
Marchionne said “a large portion” of the next-generation Jeep Wrangler will be made of aluminum, but not entirely. The company, he said, has done tests and simulations and determined the cost of producing an all-aluminum Wrangler outweighs the benefits.
“Because of the difference in cost, not just the new material but the actual assembly process, I think we can do almost as well without doing it all-aluminum,” he said.
Speculation around materials of the next-generation Wrangler has been around for years, as the company looks to shed weight from the popular SUV to meet stringent government fuel economy standards.
It could be a good sign for Toledo, where the Wrangler is currently produced. The Ohio city, Marchionne said, is one of “at least” two locations in consideration for production of the next-generation model, which is due out in 2017. He declined to disclose the other city.
In October, Marchionne caused a panic in Ohio by saying production may move out of Toledo because of significant retooling costs to provide possible enhancements such as an aluminum body.
Toledo officials are spending millions to purchase and clean up land in an attempt to persuade the automaker to keep, if not expand, production of the Wrangler in the city.
Marchionne also confirmed software issues are slowing availability of the 2015 Jeep Renegade, which started arriving in U.S. dealerships in March.
The Renegade’s issues, Marchionne said, are similar to those that plagued the launch of the Jeep Cherokee in 2013, which was delayed several months because of software glitches connected to its nine-speed automatic transmission and all-wheel-drive system.
“It’s a combination of attributes of that vehicle which is making my life horrible,” Marchionne said.
Don’t expect Marchionne to stop preaching about industry consolidation. Weeks ago, he gave an impassioned defense about the auto industry needing to consolidate to achieve long-term viability yielded little action.
During his award acceptance speech Tuesday night, Marchionne said he will “in an earnest and honest way” continue to tout his philosophies on saving capital, consolidation and seeking a new “paradigm.”
“It needs to be found because the future of this industry depends on the ability to take a look at the future in a completely different way,” he said, adding the 2008-09 auto bailout “did not deal with the ultimate stability of this industry.”
Marchionne has said he will remain CEO of Fiat Chrysler through at least 2018.