Fiat Chrysler Automobiles N.V. profits nearly doubled in 2017 as a more profitable model mix helped overcome a sales decline in North America.
“We were the only leveraged automaker in the world. We no longer are leveraged,” said FCA Sergio Marchionne, who said the company plans to outline new four-year plant on June 1. FCA will not only be debt-free this year, it will also have 4 billion euros in cash reserves.
“I’m really looking forward to 2018,” he said. “FCA is well positioned to be a top performer.”
Fiat Chrysler Automobiles said net profit for last year hit 3.5 billion euros ($4.3 billion), compared with 1.8 billion a year earlier, as the company cut its industrial debt nearly in half to 2.4 billion euros.
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FCA delivered 4.7 million unions globally, which was in line with the previous year. U.S. sales fell 8% to 2.1 million vehicles due to a decline in fleet sales to the lowest level since 2001. Net revenues for the year were nearly 111 billion euros, shy of the revenue target of 115 million euros to 120 million euros. Adjusted net profit of 3.7 billion euros exceeded guidance of above 3 billion euros.
Fiat issued full-year 2018 guidance of net revenues above 125 billion euros and adjusted net profit around 5 billion euros.
FCA has been making efforts to reduce fleet sales in favor of high-profit generators, and declines were partially offset by sales of Ram trucks, the premium Alfa Romeo brand and Jeep brand utility vehicles.
As a result of the company’s strong 2017 financial performance, FCA US LLC announced today that it will make average profit sharing payments of $5,500 to eligible UAW-represented employees. About 40,000 employees will receive the payment on Feb. 16.
As negotiated, the 2017 profit sharing payment is based on the adjusted EBIT margin performance of the North American region reported in the FCA N.V. financial results and on individual compensated hours.
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Since 2009, FCA has invested $10 billion and added more than 25,000 new jobs in its U.S. manufacturing operations. Production of the Jeep Cherokee moved from the north plant of the Toledo Assembly Complex (Ohio), to the Belvidere, Illinois Assembly Plant in June, following a $350 million transformation. More than 300 new jobs were added to support Cherokee production, which began in June.
With the Cherokee’s move, the Toledo North plant embarked on a $700 million overhaul to produce the next generation Jeep Wrangler. Production began in December with the addition of more than 700 new jobs.
The all-new Ram 1500 will begin production at the Sterling Heights Assembly Plant in the first quarter of 2018 after moving from the nearby Warren Truck Assembly Plant. Nearly $1.5 billion was invested to convert the suburban Detroit facility from unibody to body-on-frame production. The plant will add 700 new jobs.
The company has also committed to spending a total of $2 billion and adding 4,500 new jobs in the Warren Truck Assembly Plant and the south plant of the Toledo Assembly Complex. Warren Truck will be modernized to produce the Jeep Wagoneer and Grand Wagoneer alongside the Ram Heavy Duty, which will move from its current production location in Saltillo, Mexico. The Toledo South plant will be retooled to build the all-new Jeep truck. All of these actions are expected to be complete by 2020.
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In addition to profit sharing, UAW-represented employees will receive a special $2,000 bonus payment in the second quarter. Announced on Jan. 11, FCA will make the special bonus payment to approximately 60,000 hourly and salaried employees, excluding senior leadership, of FCA automotive and component operations in the U.S. because of U.S. tax reform legislation.
One response to “Fiat Chrysler Doubles Profit in 2017”
Good news indeed.