Chrysler posts first profits under Fiat's custody
Chrysler are reporting profits of $116 million for the first quarter of 2011, a return to profit for the first time since bankruptcy in 2009.
It’s taken two years since the ignominy of bankruptcy – and, it has to be said, the shedding of much of its liabilities – but Chrysler has now joined Ford and GM in the right side of the profit and loss divide.
Chrysler profits arrived in the first quarter of 2011 in the form of a $116 million net income compared to a loss in the same quarter of 2010 of $197 million.
What is good to see is that the profits were accompanied by a an increase in both sales – up 18% year on year – and revenue – up a whopping 35% – which means not only are Chrysler selling more cars, but they’re doing so with better margins. Good business.
The timing of Chrysler’s first profits under Fiat’s custody augers well for the plan we outlined last month for Fiat to gain overall control at Chrysler.
Fiat are to re-finance the expensive Government debt and replace it with market bonds at a far more competitive rate, are planning to take an additional 15% stake once those debts are repaid, and will get the final chunk of equity from the original rescue bid by year end. All that together will leave Fiat holding 51% of Chrysler.
There’s still a long way to go, and Chrysler needs more smaller and better models to be truly competitive, but it does all seem to be going the the right direction for Sergio Marchionne.
Perhaps they could celebrate by turning the Zagato TZ3 Stradale in to a production car?
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