Marchionne said Chrysler had $5.7 billion on hand at the end of
September, up from $4 billion at the end of June. He did not detail
where the
pearl jewelry increase in cash came from.
The comments come two days after rival Ford Motor Co. (F, Fortune 500)
reported a nearly $1 billion profit in the third quarter, bucking
expectations of another loss. But Ford sales have been much stronger
than those at Chrysler.
Chrysler emerged from bankruptcy on June 10. Fiat holds a 20% stake in
the company, and that is due to eventually rise to a 35% stake. U.S.
taxpayers own an 8% stake, while trust funds set up to pay for Chrysler
retirees' health care coverage control 55% of the stock.
Marchionne said financial targets for Chrysler are being met, despite
weak sales. He also said the new product line coming from Fiat will
make a significant change in the offerings U.S. customers will see in
Chrysler, Dodge and Jeep showrooms. He expects 75% of the product line
will be changed within the next 14 months.
"That's the plan. It's comprehensive. It's ambitious," Marchionne said.
Chrysler's chief financial officer Richard Palmer said the company
should fall somewhere between break-even and a profit of $500 million
(before interest, taxes depreciation and amortization) in the just more
than six months from the end of its bankruptcy to the
biwa pearl end of the year.
The automaker is even more confident about profits going forward,
according to Palmer, due to a rebound in industrywide sales, improved
U.S. market share and better access to overseas markets using Fiat's
dealership networks in Europe and South America. It sees as much as $3
billion net income by 2014. That would allow it to repay loans it owes
to the Treasury Department by that year.
But the sales will have to show significant improvement from 2008 for
the profits to return. Palmer said Chrysler will need to ship about
1.65 million vehicles worldwide to break even. Shipments this year will
end up being close to 1 million units. Chrysler also expects to
eventually reach U.S. market share of 13%, up from only 9% that it has
achieved year-to-date this year.
The company, with its large dependence on pickups, minivans and SUVs,
got the least help of any major automaker from the government's Cash
for Clunkers program, which sparked a four-week spike in industrywide
sales from late July through late August.
Chrysler's U.S. sales plunged 23% during the third quarter (and 42% in
September alone) compared to a year earlier, far worse than the 10%
decline in industrywide U.S. sales. In October, Chrysler's sales fell
30% on a year-over-year basis, even as Ford and General Motors reported
sales increases.
Jeremy Anwyl, CEO of auto industry research site Edmunds.com, said
Chrysler's break-even performance in September is partly due to
akoya pearl the one-time windfall generated by dealers who have been rebuilding their inventory after shortages in the late summer.
While reported auto sales reflect purchases by consumers, the
automakers actually book revenue when cars are sold first to dealers,
not to the final customer.
Nonetheless, Chrysler said that its relationship with Fiat will allow
it to cut costs dramatically. Chrysler head of purchasing Daniel Knott
said that new purchase systems and the use of common parts with Fiat
will allow Chrysler to save about $3 billion in vehicle parts and
another $400 million in "indirect" purchases (stuff that doesn't go
into a car or truck) by 2014.
Posted at 05:38 pm by whoyg753
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