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Chrysler Group Reports $690 Million Q1 Loss

Charges due to acquisition of VEBA shares put maker in red.

by on May.12, 2014

While the company posted a loss due to special charges, Chrysler's net revenue increased, in part, because of strong sales of the Jeep Cherokee.

Chrysler Group LLC today reported a net loss of $690 million for the quarter, due to special charges related to Fiat SpA’s acquisition the ownership stake in Chrysler held by the United Auto Workers VEBA.

Net revenue was $19 billion for the quarter, up 23% from $15.4 billion in the prior-year period, primarily driven by an increase in vehicle shipments, including Ram pickup trucks and the all-new Jeep Cherokee.

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Chrysler’s modified operating profit during the first quarter was $586 million, or 3.1% of net revenue, compared with the $435 million reported in the year-ago period. The 35% increase was primarily due to higher shipments and improved mix, which was partially offset by increased vehicle costs due to vehicle content enhancements; higher advertising costs; higher depreciation and amortization costs due to new product launches; and foreign exchange effects. (more…)

Ally Files Copyright Infringement Lawsuit Against Chrysler Group

Claims former employee took documents that helped with start of Chrysler Capital.

by on Sep.24, 2013

Ally, the former GMAC, filed suit in federal court against Chrysler Group LLC and a Spanish bank.

Ally Financial Inc., the former General Motors Acceptance Corp., has filed a lawsuit against a Spanish bank and Chrysler Group LLC in a dispute that has its roots in the 2009 auto bailout.

The federal suit alleges copyright infringement and misappropriation of trade secrets by Chrysler Capital, a partnership between Chrysler Group and Santander, a Spanish bank. In the suit, Ally asked a federal judge to Chrysler Capital, from “imitating, copying or making use of” the copyrighted forms.

A Safe Source!

Ally became the finance arm of Chrysler Group during the bailout. A task force established by the Obama White House to organize a rescue of the distressed domestic auto industry decided to prop up GMAC, which had been crippled by the recession and by GM’s ill-advised foray into the home mortgage business, which turned into an outright disaster when the U.S. real estate bubble burst in 2008. (more…)

Marchionne on Chrysler Group Status

CEO dismisses share concerns; says wait until November.

by on Oct.02, 2009


"September is not an indication of future performance. I’m not apologizing for it ...

Sergio Marchionne, the Chief Executive Officer of both Chrysler Group LLC and Fiat S.p.A posted an explanation of Chrysler’s status yesterday on a Chrysler blog site.

Marchionne was not made available to reporters, and Chrysler has suspended its long-standing sales result press conferences. The privately held company, in which U.S. and Canadian taxpayers hold a ten percent stake, also does not publish financial results.

In the Chrysler bailout, the U.S. Treasury has invested a combined $14.3 billion in the new and old entities, including $1.5 billion for Chrysler Financial and $280 million for the Chrysler warranty program.

Chrysler Group reported yesterday that total U.S. sales in September were 62,197 units, a decrease of 42% compared with September 2008.

Marchionne: “On the issue of Chrysler I think that one of the things you need to be absolutely careful about is that when you start looking at market share data, for any of the automotive producers in the U.S., there are a number of things that have impacted on market share, volumes in the month of September. We have just come off a substantial inducement to consumption that was associated with the Cash for Clunkers program, and that in and by itself is a disturbance that, at least from Chrysler’s standpoint, one, was unexpected and was announced at a time in which our industrial machine was just about ready to get started up and running. Effectively, most of our plants had been out for a substantial part of the spring and part of the summer; and the machines had not come back on until the end of July.

“Secondly, this is a process that we’re going through, and we have been through this on the Fiat side. When I arrived in 2004 we had to go through the same type of painful process of watching market share decline as we cleaned up our commercial practices in the field. And so a lot of the inducements that were being offered in the marketplace by American car manufacturers are beginning to disappear.


We Share!

(Chrysler was averaging incentives of about $5,500 a vehicle in the months preceding its bankruptcy this spring -KZ)


Leasing Now Available at Chrysler, Jeep and Dodge

An important sales tool reappears on all models after a long absence at the sales challenged maker.

by on Sep.16, 2009

Fong needs to move some metal at the Italian-controlled automaker.

Fong must "move metal" at the Italian-controlled automaker.

Chrysler Group LLC today announced it would offer a leasing option starting tomorrow for U.S. customers on all 2010 model year Chrysler, Jeep and Dodge vehicles through Chrysler’s preferred lender, GMAC Financial Services.

Year-to-date, Group sales are of -40% as the one-two punch of impending bankruptcy and a gas guzzling product line combined to knock the company’s vehicles off the consideration list of the few shoppers that were in  the marketplace.

Like other automakers, Chrysler, it appears, was caught short with an inadequate supply of small cars — or more troubling for its new taxpayer owners, lack of consumer demand for the cars  it has and will have for the next year or two —  just as demand for fuel efficient cars surged due to federal government financed incentives under the CARS program, aka Clunkers.

GMAC re-initiated leasing as a financing option at General Motors in early August in support of a lease promotion on select GM models, along with competitive standard rates on all new GM vehicles.

“ We are pleased to re-enter the leasing market so we can offer customers the opportunity to lease vehicles at rates competitive with the marketplace,” said Peter Fong, President and Chief Executive Officer–Chrysler Brand and Lead Executive for the Sales Organization, Chrysler Group LLC. “Our ability to offer additional financing options will benefit consumers who have long been fans of leasing and appreciate the flexibility this financing option gives them.”

Easy Terms!

Easy Terms!

For car shoppers looking for lower payments – long the allure of leasing – the new financing programs at both Chrysler and GM may not be of help.


Chrysler Group Restarts Production at Seven of Its North American Assembly Plants

Building vehicles is good. Selling them is better yet.

by on Jun.17, 2009

The Ram arrived just in time for the financial collapse and the Great Recession.

The Dodge Ram pickup arrived just in time for the financial collapse and the Great Recession.

It’s a start anyway.

Battered Chrysler Group LLC said today that it will turn on assembly lines the week of June 29th at seven of its plants that were shut down when old Chrysler filed for bankruptcy. The resumption of production, if followed by a corresponding sales increase of the vehicles made, is vital for the cash flow of the revived company, and – just as importantly – its dealers and suppliers.

All of Chrysler’s plants were shut down at the beginning of May because of complications arising from the bankruptcy filing, the refusal of several key suppliers to continue shipping parts as the court sorted things out, and the need to keep a close watch on the inventory of vehicles that saw days supply rising. Chrysler sales plummeted 46% year-over-year through May, the months when the impending collapse or bankruptcy itself dominated the news media. No model from any Chrysler brand is currently listed in the Top Ten U.S., sales list.

General Motors Corporation also announced at the end of April downtime at its 13 assembly operations in North America. The closings range up to nine weeks in duration, depending on the plant. All but two of the U.S. and Canadian plants were already scheduled for the traditional summer shutdown during the weeks of June 29th and July 6th. It is an attempt by bankrupt GM to trim its inventories by taking 190,000 vehicles out of production in the second and third quarters.

Subscribe to TheDetroitBureau.comThe Chrysler announcement came one week after Fiat Group took effective control of the new company by finalizing its global “strategic alliance,” which saw the creation of Chrysler Group.

Running through July 1 Chrysler is offering zero percent financing for 60 months through GMAC Financial Services on select 2009 model vehicles, or up to $4,000 in Consumer Cash on 2009 model vehicles. In addition, current Chrysler vehicle owners are eligible for $1,000 Owner Loyalty cash on most 2008 and 2009 Chrysler, Jeep and Dodge vehicles. These offers are in addition to the $1000 Credit Union Bonus Cash on select products for qualified credit union members who finance their new vehicle purchase through a participating Credit Union under the Invest in America program. These incentives are valid through July 1, 2009.

Since Chrysler only reports sales on a monthly basis, it is too early to say whether sales are picking up in a meaningful way. Overall, industry sales remain stuck  below 10 million units on an annualized basis, the lowest level in more than four decades.


U.S. Government Buys Big Three Cars

Chrysler, Ford and GM benefit from Federal fleet order.

by on Jun.11, 2009

Paul Prouty, Acting Administrator o The General Services Administration

The $210 million fleet order is the latest taxpayer gift to the ailing Big Three.

The Obama administration is pushing ahead its plans to purchase more than 14,000 new vehicles from General Motors Corporation, Ford Motor Company and Chrysler Group LLC. Earlier in the week, with the economy continuing to falter, Obama asked various U.S. agencies to step up spending of the $787 stimulus package approved by Congress back in February.

Obama also said the order represents part of the administration’s effort to bolster both domestic automakers and suppliers, who have been hit hard by the recession. Auto production in the U.S. has dropped by almost 40% this year, and shows no signs of reviving.

The U.S. General Services Administration has ordered 14,105 vehicles for the Federal fleet using $210 million of funds from the American Recovery and Reinvestment Act.

The new order, placed June 1, brings the total number of fuel efficient vehicles ordered by GSA using ARRA funds to 17,205 at a taxpayer cost of $287 million. The order includes 2,933 Chrysler vehicles worth $53 million; 7,924 Ford vehicles for $129 million; and 6,348 General Motors vehicles for $105 million.

The American Recovery and Reinvestment Act of 2009 (Recovery Act) was signed into law by President Obama on February 17, 2009. The administration  calls it “an unprecedented effort to jump start our economy, create or save millions of jobs, and put a down payment on addressing long-neglected challenges so our country can thrive in the 21st century. The Act is an extraordinary response to a crisis unlike any since the Great Depression, and includes measures to modernize our nation’s infrastructure, enhance energy independence, expand educational opportunities, preserve and improve affordable health care, provide tax relief, and protect those in greatest need.”

“This order represents just one of the multiple ways we are helping our customers meet their economic recovery and green government initiatives,” said Acting GSA Administrator Paul F. Prouty. (more…)