FCA CEO: Gov’t shutdown could delay new truck launch

Gabrielle Coppola and Ryan Beene
Bloomberg News

The government shutdown is delaying Fiat Chrysler Automobiles NV’s efforts to bring crucial new heavy-duty Ram pickups to the market.

The Ram 3500 still needs emissions certification from the U.S. Environmental Protection Agency to be approved for sale, and that process is being held up by the shutdown, Fiat Chrysler Chief Executive Officer Mike Manley said at the North American International Auto Show.

“I am concerned, very concerned, because if it continues, it will have an impact on on the launch,” Manley told reporters in Detroit. “The earlier that it can be resolved, clearly the better, and obviously I’m not the only person saying that.”

Fiat Chrysler pulled the wraps off the new Rams at the auto show earlier Monday. The company is riding strong sales momentum in the all-important full-size pickup segment, having just outsold General Motors Co.’s Chevrolet Silverado to rank second in the fourth quarter, behind Ford Motor Co.’s F-Series. The light-duty Ram won the North American Truck of the Year award at the show.

While Ford and GM are closing plants and killing off sedans to invest in electrification and autonomous vehicles, Fiat Chrysler has overhauled its U.S. factories to build more sport utility vehicles. It was the only one of Detroit’s three automakers to increase sales in a flat U.S. market last year, with record deliveries for its Jeep and Ram brands. The automaker sold about 1.6 million Jeep models worldwide, Manley said.

The truck segment this year will be “robust,” he predicted, but sales for the total U.S. market will be about the same as 2018.

“I think there’s little opportunity for it to grow,” Manley said.

The Italian-American company is retooling a Detroit engine plant to make a new three-row Grand Cherokee, on top of preparations to build the Jeep Wagoneer and Grand Wagoneer in Warren.

Fiat Chrysler needs additional capacity to produce the two Wagoneers, along with the $1 billion investment announced last January, Manley said, noting that the company will add a “significant” number of new jobs.

The partial federal shutdown, now in its 24th day, has idled the EPA, including the agency’s Office of Transportation and Air Quality. Its vehicle-testing lab is responsible for issuing certifications verifying that new vehicles comply with federal emissions rules, which automakers must obtain before sales can begin.

Fiat Chrysler last week agreed to pay some $800 million to settle civil lawsuits by states, car owners and the U.S. Justice Department over alleged violations of U.S. clean-air rules. Regulators found illegal emissions-control software on 2014-2016 Jeep Grand Cherokee SUVs and Ram 1500 pickups that helped the vehicles pass government lab tests while exceeding pollution standards in real-world driving.