Chrysler Group swings to a profit in third quarter
Chrysler Group said it swung to a profit in the third quarter.
The company, which is gradually combining its operations with majority shareholder Fiat, the Italian automaker, said it had net income of $212 million in the third quarter, contrasted with a net loss of $84 million in the same period a year earlier.
“Chrysler is outpacing the industry this year with sales up 26.1% third quarter to third quarter and 23.1% for the year. In addition to higher vehicle sales volume -- thanks largely to Jeep -- Chrysler has lowered incentives, and that’s helped to boost the average transaction price. That's the not-so-secret formula for accomplishing profits and a turnaround,” said Michelle Krebs, an analyst with auto information company Edmunds.com.
The company has been helped by the introduction of well-received new models, including the Jeep Grand Cherokee, Dodge Durango and the Chrysler 200 and its alliance with Fiat.
Third-quarter revenue rose 19% to $13.1 billion.
“In the third quarter, Chrysler Group achieved increased sales and positive financial results, totally in line with the plan we laid out in November 2009, said Sergio Marchionne, Chrysler’s chairman and chief executive. “This house continues to be fully focused on financial performance and making outstanding cars and trucks by fully leveraging its alliance with Fiat.”
On Wednesday, the United Auto Workers said its members have ratified a new labor agreement with Chrysler.
The Chrysler "agreement adds 2,100 new UAW jobs which, together with jobs added at GM and Ford, mean more than 20,000 direct manufacturing jobs will be added to our economy," said UAW President Bob King.
The UAW represents 26,000 Chrysler workers, including 3,000 salaried employees, at 48 Chrysler facilities in the United States, making vehicles and components with the Chrysler, Jeep, Dodge, Mopar and Ram Truck brands.
Also Wednesday, Ford Motor Co. posted a third-quarter profit, but it was slightly less than the same period a year earlier as losses in Europe and Asia dragged earnings down.
Ford said it had net income of $1.6 billion, about 2% less than the same period a year earlier.
It was profitable in North America and South America but lost money in other regions of the world. Revenue rose by $4.1 billion, or 14%, to $33.1 billion.
-- Jerry Hirsch
Photo: Sergio Marchionne, chief executive officer of Chrysler Group LLC and chairman of Fiat SpA, answers reporters' questions during the Frankfurt Motor Show, in Frankfurt, Germany. Credit: Bloomberg.