Chrysler has taken some serious criticism after going through bankruptcy last year and emerging under the guidance of Italian auto giant Fiat. After it posted an operating profit in the first quarter this year, Chrysler gave skeptics something to think about. The automaker has now done it again by posting another operating profit in the second quarter.
The news comes from Fiat and Chrysler Group CEO Sergio Marchionne, who announced operating profit in a conference call with financial and auto analysts. Although Marchionne made the announcement about the profit, he was coy with the details, which will be revealed August 9.
Posting a second straight operating profit shows that Marchionne's plan to turn the company around is working, combined with a recovering economy. Chrysler's first operating profit this year was $143 million, which lessened the burden of a $197 million first quarter net loss. Although still in the red, it was substantially better than the $2.7 billion Chrysler lost in the fourth quarter of 2009.
Since taking the reins at Chrysler, Marchionne has worked to significantly reduce costs. Even as Chrysler's sales have continued to fall in the U.S., the company is losing less money. According to Marchionne, Fiat's performance in the second half of the year will be even better than the first, and a slate of new Chrysler products will help boost sales. The success of the 2011 Grand Cherokee that just hit dealerships, along with the forthcoming launch of the 2011 Chrysler 300 and Dodge Charger later this year, will ultimately tell the story.
We'll have to wait for the second quarter numbers to be released early next month before we can tell just how much progress has been made in these few short months.
Source: Automotive News (Subscription required)