Chrysler foresees profit in 2011
TEXT OF STORY
Bob Moon: Chrysler reported earnings today. It lost a lot of money, largely because of expensive interest on loans from the U.S. and Canadian governments. Detroit’s longtime No. 3 was able to deliver a somewhat surprising operating profit last year, though
— $763 million.
Still, as CEO Sergio Marchionne put it, the company’s job is not done. Marketplace’s Alisa Roth reports.
Alisa Roth: There are a lot of people who didn’t think Chrysler would live to see 2011. But it has — after declaring bankruptcy, getting a government bailout and selling a quarter interest to the Italian carmaker, FIAT. If Sergio Marchionne, the CEO, is right, Chrysler will even turn a profit this year.
Bruce Belzowski is at the University of Michigan’s Transportation Research Institute. He’s not as optimistic as Chrysler’s CEO. But he does give the company a passing grade.
Bruce Belzowski: They get a B minus right now. That’s not C’s or D’s and I think for any car company in this stage, that’s a good, that’s a decent grade.
The reborn Chrysler made it through its first big challenge: It introduced new and improved versions of several vehicles — the Jeep Cherokee, for example. And drivers like them. But there are plenty of challenges still to come.
Belzowski: The longer term is that the FIAT-based vehicles still need to make it into the U.S.
The company is just starting to roll out the first of those models: the iconic Fiat 500. There will be more next year. Michael Robinet is an analyst with IHS Automotive, a consulting company. He says Chrysler still has a long way to go.
Michael Robinet: The end game for FIAT in the future is to really gain a lot more flexibility in where they can take Chrysler, in terms of modifying the operations, bringing in new vehicles and not really have any equity stake from the government.
Sergio Marchionne, the CEO, says the company’s working on it. He says he’d like to pay back more than $5 billion in U.S. government loans this year, which will help pave the way for Chrysler to get listed on the stock market again.
I’m Alisa Roth for Marketplace.
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