Chrysler Narrows Losses, Plans More Hiring
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“We’ve been given an opportunity here to fix this house, and the people have responded way beyond anybody’s expectations.” –Chrysler CEO Sergio Marchionne.
As Chrysler posts a slight third quarter loss of 84, million dollars, the company’s CEO says they may be doing some more hiring in the coming months.
That third quarter loss was roughly half of the losses Chrysler posted in previous quarters, and in an auto industry where financial reports are measured in billions of dollars, losing 84 million is close to breaking even.
“The third quarter has been a decent quarter for Chrysler”, said CEO Sergio Marchionne, in a conference call with reporters and analysts. “I think we’re happy with what was accomplished.”
The 239 million dollar operating profit was the third consecutive one for Chrysler, which expects to post a 700 million dollar operating profit for the full year.
“We’re satisfied with the progress that we’ve made in terms of getting our ducks lined up in terms of delivering earnings,” said Marchionne.
Chrysler is paying a relatively high interest rate on its government loans. Marchionne says the company would be profitable without those payments.
Chrysler has hired several thousand workers to staff new shifts at several plants, and has brought some new engineers and designers into the company’s headquarters. Marchionni said that will continue into the new year.
“The only thing I can tell you is they may go up,” he said, when asked about 2011 employment levels. “I can’t tell you by how much. We’re thinking of hiring additional engineers.”
We could also see more work coming to Chrysler’s Jefferson North Plant, which now builds the Jeep Grand Cherokee and Dodge Durango. Marchionne said the plant will build an as yet unnamed product–based on the Grand Cherokee–that will sold outside the United States, under one of Fiat’s European brands.
Jefferson North added a second shift over the summer, and there’s been a lot of speculation that it may be ready for a third shift.
Chrysler will not launch its Initial Public Offering of stock until the second half of next year year. Marchionne says they will be cosely watching GM’s upcoming IPO.
“We’re gonna learn a lot as that process goes forward. We’re gonna do the right thing.”
Marchionne says he has read the book “Overhaul,” by Steven Rattner, who lead the Obama Auto Task Force. The Chrysler CEO said he often didn’t recognize people who were mentioned in the book.
“I think some of the assessments really stretched the limits of credulity,” said Marchionne. “What I think the book does well, is it indicates, properly, regardless of shadings, the amount of gut-wrenching analysis that went on.”
But the Chrysler CEO believed that the entire organization was unfairly blamed for the mistakes of a few past senior managers.
“What I found most offensive about the book was the level of disrespect shown to the institution of Chrysler as a house.”
Chrysler planning to upgrade it’s guidance for 2011 when it releases full year 2010 figures in about three months. Marchionne expecting new products to return Chrysler to long term profitability.
The Grand Cherokee was launched in June to strong reviews. Sales were up 41 percent through October. Chrysler says it contributed to the better third quarter showing.
“I think it’s a good basis to look at the launch of the Durango, which is coming out in Q4 this year,” said Marchionne.
The new Dodge Durango is based on the Grand Cherokee, and is also made at Detroit’s Jefferson North plant.
Chrysler launching a number of new products in the final two months of the year, including new versions of it’s large cars–the Chrysler 300 and Dodge Challenger–and a replacement for the mid-sized Sebring, that will be called the Chrysler 200.
Marchionne says the new products were shown to dealers recently, and received a very positive response.
“Our suspicions that we’re doing the right thing were confirmed.”
Copyright, 2010. WWJ Newsradio 950, All Rights Reserved.
WWJ AutoBeat Reporter Jeff Gilbert and The Associated Press contributed to this report.