Chrysler Reports $370 Million Loss In Q2, Shows Momentum

LINK: WWJ has obtained a copy of an email, Chrysler CEO Sergio Marchionne sent to workers today about second quarter earnings.  View it here.

DETROIT (WWJ)-Chrysler says it's making progress on its turnaround, despite a $370 million dollar second quarter loss.  The company attributed that loss to the cost of repaying its government loans, and says it would have made $181 million otherwise.

CEO Sergio Marchionne says the quarter was a huge step forward for Chrylser.

"We continue to confound the experts who were prepared to write us off," said Marchionne in an email to workers, obtained by WWJ. "This was a historic quarter for Chrysler, one in which we repaid every cent of our taxpayer loans plus interest six years before they were due."

Marchionne says Chrysler is continuing to "establish credibility by fulfilling our commitments."

Chrysler slightly improved the amount of cash it had, from $9.9 billion at the end of the first quarter to $10.2 billion when June ended.  It cut its debt by a full billion dollars.  That debt now stands at $12.3 billion.  Chrysler did exchange government debt for much less expensive private debt in the 2nd quarter.

Analysts feel Chrysler showed progress in the second quarter, but isn't completely out of the woods

"What this is really about for Chrysler is that 'we really stemmed the losses," said Bill Visnic of Edmunds.com.

Chrysler's new products have been well received, Visnic said, and its sale are up.  But, Visnic says Chrysler's turnaround remains behind its domestic competitors.

"Right now Chrysler still has to be mindful that there are a lot of gaps in its product lineup," he said.  Chrysler is working to fill those baps through its close association with Fiat, which now has a majority stake in Chrysler.

The next step is a combining of Chrysler and Fiat management.  An announcement is expected fairly soon on a new management structure.