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Chrysler Reports 1st Full-Year Profit Since 1997

“Modified” operating profit hits $2.0 billion; net at $183 million.

by on Feb.01, 2012

Chrysler/Fiat CEO Sergio Marchionne meets with reporters at the 2012 Detroit Auto Show.

For the first time since 1997, Chrysler has ended the year in the black with a net profit of $183 million and a “modified” operating profit of $2.0 billion, the automaker reported this morning.

After standing widespread predictions of its demise on their head, Chrysler now is  predicting another strong performance in 2012, including a double-digit gain in revenue and a 50% increase in operating income.

The figures come as a sharp turnaround for a company that declared bankruptcy less than three years ago and which survived only after receiving a more than $12 billion bailout from the U.S. Treasury.  But the Chrysler of today, now controlled by Italy’s Fiat, is a decidedly different manufacturer that went into Chapter 11 protection shortly after the collapse of a failed merger with Daimler AG of Germany.

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“The house is in good order. We are proud of the work we’ve done,” said Sergio Marchionne, who serves as Chief Executive Officer of both Chrysler Group LLC and Fiat SpA. “Now we greet a new year of high expectations with our heads down, forging ahead and focused on executing the goals we’ve set for ourselves as a company.”


Chrysler Back in the Black After Five Years.

Maker also outlines details of government loan payoff.

by on May.02, 2011

New products like the Jeep Grand Cherokee helped Chrysler reverse course during the first quarter.

For the first time in nearly five years, Chrysler Group posted a quarterly profit as the company’s improbable comeback continued to pick up momentum.

Chrysler earned $116 million for the first quarter, reversing the $197 million loss posted during the first quarter of 2010, as the company’s revenue grew by 35% to $13.1 billion in the first three months of 2011.

The latest number mark a potentially significant reversal of fortune for a company that hasn’t made money since former partner Daimler AG effectively dumped the U.S. arm on financial equity giant Cerberus Capital Management.  Failing to reverse course, Cerberus agreed to put Chrysler into bankruptcy protection in 2009, the automaker emerging under the control of Italy’s Fiat SpA.

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The first-quarter turnaround “shows we’re on the right path,”  Sergio Marchionne, the CEO of both automakers, said during a media conference call. “We’re now in an exceptionally solid financial position. It’s been a good quarter and a good operating performance.”

Marchionne separately noted, “We remain focused on delivering great products to our customers and continuing to achieve the sales and financial targets outlined in our 2010-2014 business plan.”


Marchionne Outlines Plan to Repay Chrysler’s Loans

Move takes maker step closer to IPO.

by on May.02, 2011

Why is this man laughing? Sergio Marchionne outlines details of the government loan payoff.

Chrysler will use a mix of loan money, new debt securities and a line of credit to repay the $7.5 billion it owes to the U.S. and Canadian governments, the maker announced today, providing the first details on a payback plan first announced last week.

At about the same time, the U.S. maker’s Italian partner, Fiat SpA, will invest $1.27 billion in order to increase its stake in Chrysler from 30% to 46%.

Sergio Marchionne, the CEO of both automakers, has indicated he expects to meet another hurdle set by the 2009 federal bailout to add yet another 5% stake, which would give Fiat a full 51% share of Chrysler.  Sometime after that, depending on Chrysler’s financial health and the strength of the stock market, the maker is expected to stage an IPO that would mark its return to public trading.

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Details of the loan repayment were announced today at the same time Chrysler revealed it has earned $116 million during the first quarter of 2011, its first net profit since emerging from bankruptcy in June 2011.  (For more on Chrysler’s earnings report, Click Here.)

The goal is to pay off $5.8 billion owed to the U.S. government by June 30th, along with another $1.7 billion due to the Canadian treasury.  Alternative financing will come from three components:


Chrysler Posts First Profit Since Bankruptcy

“Gaining momentum,” proclaims Marchionne of $116 mil net.

by on May.02, 2011

Chrysler/Fiat CEO Sergio Marchionne during a visit to the minivan plant in Windsor, Ontario.

Chrysler Group LLC reported $116 million in net income for the first quarter of 2011, marking the first time the long-troubled Detroit maker has been in the black since it emerged from Chapter 11 protection in June 2009.

By comparison, Chrysler reported a $197 million loss during the first three months of 2010.  The maker has been struggling to reverse its fortunes even as it has come under the increasing control of Fiat SpA.  The Italian maker was given a 20% stake following Chrysler’s emergence from bankruptcy.  That stake is now 30%, and is expected to reach 46% as soon as executes a plan to pay off its government loans.

“Chrysler Group’s improved sales and financial performance in the first quarter show that our rejuvenated product lineup is gaining momentum in the marketplace and resonating with customers,” said Sergio Marchionne, Chief Executive Officer of both Chrysler and Fiat, in a prepared statement.

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“These results,” the executive added, “are a testament to the hard work and dedication of our employees, suppliers and dealers, all of whom are helping Chrysler create a new corporate culture built on the quality of our products and processes, and simple, sound management principles.”