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Chrysler posts quarter losses, but predicts operating profit

Marketplace Staff Nov 8, 2010
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Chrysler posts quarter losses, but predicts operating profit

Marketplace Staff Nov 8, 2010
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TEXT OF INTERVIEW

BOB MOON: Chrysler says it lost $84 million in the third quarter — down by half from the previous 3 months. But for the year overall, it’s predicting an operating profit. Alisa Roth covers the auto industry for Marketplace. Alisa, seems like a case of better news if not good news. Can we take this to mean Chrysler’s reorganization is working?

ALISA ROTH: It seems like it does. The company did post a net loss, as you said — but its operating profit for the quarter was actually $239 million. What’s happening is it’s paying very high interest rates on loans from the U.S. and Canadian governments and that’s ending up as a net loss. The company also said it’s having to pay more to switch factories over to different models. But Sergio Marcchionne, the CEO, said the company’s doing exactly what it said it would in its five-year plan, and that it’s living up to its commitments and exceeding its financial objectives.

MOON: Financial objectives — they’re important to be sure, but Chrysler is supposed to be selling cars. How’s that going?

ROTH: Worldwide sales were down a bit this last quarter. But sales in the U.S. were up 20 percent this quarter. And if you look at specific vehicles, it’s even better than that sales of the Jeep Grand Cherokee was just redesigned were up 35 percent. Sales on the the Town and Country minivan were up 48 percent. And Chrysler’s vehicles are selling for higher prices than they were last year. Over the next couple of months, Chrysler is supposed to be rolling out a whole line of new-or refreshed-models. So if that goes well we could continue to see more of this kind of success.

MOON: Alisa Roth thank you.

ROTH: You’re welcome.

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