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Posts Tagged ‘Chrysler Group’

FCA Endures Profit Drop Due to Fiat Takeover

Sales, shipments, US marketshare all rise in 2014.

by on Feb.03, 2015

Despite increasing its marketshare by a full point last year, the former Chrysler Group saw earnings decline.

Despite increases in shipments, sales, marketshare and revenue, FCA US, the former Chrysler Group, saw its overall profits drop substantially in 2014 due to the completion of Fiat’s takeover of Chrysler.

FCA US reported full-year net income of $1.2 billion compared with net income of $2.8 billion in 2013. The maker’s fourth quarter net income was $669 million, down about two-thirds from $1.6 billion during the same period last year.

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The company took a hit this year on $1.2 billion in “unfavorable infrequent items,” such as the costs associated with the Fiat takeover Chrysler. Conversely, last year’s results benefitted from $962 million related to the release of valuation allowances on deferred tax assets. (more…)

Fiat Expects to Finish Ferrari Spinoff Next Summer

IPO part of a plan to grow FCA globally.

by on Nov.14, 2014

Sergio Marchionne told reporters in Italy that the Ferrari IPO will now happen in the second or third quarter of 2015.

The Ferrari initial public offering is now expected to be complete between the second and the third quarter of 2015, Fiat Chrysler Automobiles Chief Executive Sergio Marchionne told reporters in Italy.

FCA announced last month it planned to spinoff Ferrari from the group, selling a 10% stake via a public offering and distributing the rest of FCA’s stake in Ferrari to its shareholders. The Ferrari IPO is expected to raise $5 billion to reduce FCA’s debt and bolster the company’s balance sheet.

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The spinoff is part of a bigger capital-raising plan that also includes a $2.5 billion convertible bond issue to help cut debt and fund an ambitious business plan aimed at turning FCA into a global carmaker. (more…)

Chrysler Reports 22% Jump in Q2 Profits

Increased sales, better pricing helps maker to strong result.

by on Aug.06, 2014

Jeep is the fastest growing brand in the U.S., according to Chrysler Group, and played a central role in its strong second quarter.

Chrysler Group LLC, which is now part of Fiat Chrysler Automobiles, rode a steady increase in sales to 22% increase in net income during the second quarter.

Net income for the second quarter totaled $619 million for the quarter, compared to $507 million in the year-ago quarter, the Chrysler group said in its preliminary financial report for the second quarter and first half of 2014.

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Net revenue for the second quarter was $20.5 billion, up 14% from $18 billion a year ago. Net revenue for the first half of the year was $39.4 billion, compared with $33.4 billion a year ago. Increased shipments of vehicles such as the Ram pickup and the all-new Jeep Cherokee drove the year-over-year improvements. Jeep is also now the fastest growing brand in the auto industry. (more…)

Fiat Shareholders Approve Chrysler Merger

Deal passes final hurdle after five years.

by on Aug.01, 2014

Fiat SpA shareholder overwhelmingly approved the merger with Chrysler creating Fiat Chrysler Automobiles N.V.

Just over five years after the Italian automaker effectively took control of bankrupt American manufacturer, Chrysler, shareholders at Fiat SpA have voted their approval of merging the two companies into what they hope is a much more powerful, global automotive firm.

The vote, which came a day after Fiat reported a sharp decline in second-quarter earnings, now triggers several additional steps. The newly formed Fiat Chrysler Automobiles hopes to complete a goal of CEO Sergio Marchionne’s, listing its stock on the NYSE, starting by mid-October.

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“With today’s meeting begins the future of our company,” John Elkann, the grandson of late Fiat patriarch Gianni Agnelli and now its chairman, said at the start of the shareholders meeting, likely the last that will be held in Italy. (more…)

Chrysler Experiencing Ignition Switch Déjà vu?

NHTSA investigating 1.25 million vehicles for GM-type problems.

by on Jun.18, 2014

The 2010 Chrysler Town & Country is one of more than 1 million vehicles that are part of a NHTSA investigation into ignition switch issues similar to those at General Motors.

As GM CEO Mary Barra testified at a congressional committee hearing that ignition switch issues could be an industry-wide problem, the National Highway Traffic Safety Administration announced it has opened two probes into similar possible ignition switch defects in about 1.25 million Chrysler vehicles.

The investigation, which Chrysler officials said they are co-operating with, actually has a tie to GM’s recent issues, according to the safety agency.

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“(The investigations) are an outcome of NHTSA’s communication with automotive manufacturers and suppliers regarding air bag design and performance related to the position of the vehicle ignition switch,” which began as a result of GM’s recalls, NHTSA said. (more…)

Chrysler Kicks Off Nine-Speed Production in Indiana

Company uses old plant for new gearbox.

by on May.14, 2014

FCA CEO Sergio Marchionne told a crowd at the dedication of the new Tipton, Indiana, plant, it will play a vital role with the company.

Chrysler raised an Indiana plant from the dead to build its new nine-speed transmission that will be used to save fuel in the company’s passenger cars and utility vehicles and future fuel-efficiency targets.

Chief Executive Sergio Marchionne said at the company’s official dedication of the Tipton, Indiana, plant, which was basically abandoned five years ago, the facility is will play a vital role in creating prosperity for the both the company and for communities in north central Indiana.

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“My confidence is rooted firmly in the knowledge that those of you who work in this area have shown a consistent dedication to delivering products with outstanding quality,” said Marchionne, who also told reporters is looking at ways to expand Jeep production in the U.S. but offered no specifics. (more…)

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…)

Chrysler Plans to Keep Minivan Plant in Windsor

Maker skips subsidies for plant upgrades due to politics.

by on Mar.04, 2014

FCA Chief Sergio Marchionne said the company won't seek subsidies from the Canadian government to upgrade its plants in Brampton and Windsor, Ontario.

Fiat Chrysler Automobiles, the parent of the Chrysler Group, has decided to continue building minivans in Windsor, Ontario despite failing to win the subsidies it had hoped for from the Canadian government.

The maker had warned that it might pull out of both the Windsor plant and another factory in Brampton, Ontario due to the high cost of manufacturing in Canada.  But the dispute became “a political football,” said FCA CEO Sergio Marchionne during an appearance at the Geneva Motor Show.  Despite his frustrations with the lack of government support, Marchionne decided to continue to two operations.

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Instead, the company will finance the $3.6 billion project that is expected to produce a new minivan and upgrade the FCA rear-wheel-drive platform produced at the Brampton plant out of its own corporate treasury.

“Our commitment to Canada remains strong,” said Marchionne, who was born in Italy but spent most of his youth growing up in Toronto and Windsor.

The maker pulled the requests because the politics involved weren’t worth the end result, said Marchionne. (more…)

Chrysler Raises $5 Billion to Prepay VEBA Note

Maker saving $200 million with latest financing efforts.

by on Feb.11, 2014

Chrysler Group completed its efforts to prepay its VEBA trust obligations.

Chrysler Group LLC has finished raising approximately $5 billion to prepay an unsecured note issued in June 2009 to the United Auto Workers VEBA Trust as Fiat’s takeover of Chrysler cleared another milestone.

Chrysler also disclosed it expects to record a non-cash charge of approximately $500 million in connection with the repayment of the VEBA Trust Note. The transaction helps the health care benefits promised more than 80,000 Chrysler retirees, who belonged to the UAW, more secure.

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“This transaction brings to a successful and earlier than anticipated conclusion the process that led the U.S. and Canadian governments, the UAW and the VEBA, together with Fiat, to take on the task of reestablishing Chrysler as a viable automotive enterprise,” Chrysler Group LLC Chairman and CEO Sergio Marchionne said in a statement that accompanied the announcement had bee completed. (more…)

Fiat, Chrysler Consummate Union by Mixing Money

Company borrows $5 billion to refinance debts.

by on Feb.06, 2014

Fiat and Chrysler are consummating their "marriage" by mixing their money.

Like many marriages, the union isn’t complete until all the money is lumped into one account. Fiat Chrysler Automobiles (FCA) just finished that step when it borrowed $5 billion to refinance the debts of the two formerly separate companies.

The Chrysler Group said the previously announced offering of secured senior debt securities raised approximately $3 billion and a term loan facility was expected to raise approximately $2 billion.

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Chrysler Group intends to use the net proceeds of the bond offering, together with borrowings under the senior secured term loan facilities, to repay all amounts outstanding under the senior unsecured note issued on June 10, 2009 to the UAW VEBA Trust with an original face amount of $4.6 billion. The trust had owned 41.5% of Chrysler Group stock before it was bought out by Fiat as part of the merger of the two companies. (more…)