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Chrysler Operating Earnings Could Near $2 Billion

Maker likely to report first annual net profit since 1997.

by on Jan.30, 2012

A reason to smile for Chrysler CEO Marchionne?

Borrowing the title of a ‘60s-era counterculture novel, Chrysler executives might say, “Been down so long it looks like up to me,” especially if preliminary estimates hold true on Wednesday.  That’s when the long-troubled U.S. maker plans to report its fourth quarter and full 2011 financial figures which – analysts anticipate – could see as much as $2 billion in full-year operating profits.

That would mark the first time Chrysler will have gone into the black for the full year, on an operating basis, since 1997, just before its ill-fated “merger-of-equals” with German’s Daimler AG.  Significantly, the announcement of any full-year profit would come as a stark contrast to the situation the maker found itself in less than three years ago, when it was forced to file for Chapter 11 bankruptcy protection.

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On a net basis, the maker went $42 million into the red for the first nine months of 2011 – but that figure includes $551 million in second-quarter charges resulting from CEO Sergio Marchionne’s decision to pay off Chrysler’s federal bailout loans years ahead of schedule.  Even with those charges, the smallest of the Detroit makers is expected to land in the black for the full year.


Obama Set to Visit Chrysler Plant

Journey to Jeep plant carries strong political overtones.

by on Jun.03, 2011

As a candidate, then-Senator Obama made an earlier visit to the Jeep plant in Detroit.

In a move fraught with political overtones, President Barack Obama will visit a Chrysler Group plant in Toledo, Ohio today to hail the ongoing recovery of the once-bankrupt automaker, which has now posted 14 consecutive months of sales growth and is preparing to sever its ties with the government.

The president’s visit, meanwhile, comes just after the automaker finished paying off its federal loans, with Fiat now preparing to buy out the Treasury Department’s remaining 6.6% stake in Chrysler, cutting its ties to the government.

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The Obama administration has made no secret of the fact it considers the bailout to have been an immense success – despite the fact that the White House also disclosed this week it expects $14 billion of the $80 billion advanced Chrysler and General Motors will not be recovered by the U.S. Treasury.

At least initially, the rescue efforts were largely unpopular with the taxpaying public, so the Administration is hoping to focus on the payoff – with an emphasis on jobs.  The White House has argued that despite the costs the bailout probably saved as many as 1 million jobs and helped stabilized America’s manufacturing sector at a time when it was teetering on the brink of disasters.


Opinion: Obama Deserves Cheers As He Tours Detroit Auto Plants

Ongoing Big Three upturn shows bailout was worth it.

by on Jul.30, 2010

Recent events should make it easier for President Obama to promote the bailout of GM and Chrysler.

Whichever side of today’s highly partisan spectrum you fall on, there’s little doubt President Barack Obama’s visit to Detroit is clearly political in nature.  But why shouldn’t it be?  In an era when the merits of almost everything the government does is debated, ad nauseum, the current occupant of the Oval Office has reason to come crowing as he tours a pair of domestic auto plants.

Despite the strong criticism leveled against the bailout of General Motors and Chrysler, last year, there’s growing evidence the tens of billions of dollars invested into the automakers was worth the risk – and that we taxpayers actually may get much, perhaps all, of our money back when the two makers go public once again.

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At a time when critics of the White House weep over the inability to generate jobs – while resisting the need to prop up those out of work – one can only imagine just how deep a hole the American economy might have toppled into had GM and Chrysler been written off.  By most accounts, 1 million jobs were directly at risk, never mind the multiplier effect their collapse would have had on the broader economy.