DaimlerChrysler earned $3.4 billion in 2005 with the Chrysler Group accounting for $1.8 billion of the profit, the company announced on Thursday.
The Mercedes Benz Group posted an
operating profit of $1 million in the fourth quarter, and finished the year with
a $600 million loss, but DaimlerChrysler AG executives insist the group is
finally moving in the right direction.
DaimlerChrysler chief executive
Dieter Zetsche, who continues to double up as Mercedes’ CEO, said the Mercedes
group is focused on trimming costs and improving the efficiency of its
processes, even as it launches a new effort to improve customer satisfaction and
continues to launch new products this year, including the new GL-Class, E-Class,
and CL-Class cars and trucks.
The loss at Mercedes included
charges on earnings totaling $1.3 billion in connection with the restructuring
at smart and another $675 million relating to the staff-reduction program at the
Mercedes-Benz car group, which was announced at the end of September 2005.
Chrysler in the black
The Chrysler Group managed to post
a double-digit increase in operating profits in the fourth quarter. The $507
million operating profit in the quarter, coupled with a strong showing by
DaimlerChrysler Financial Services, which more than doubled its operating profit
to $411 million in the same period, helped offset the weak performance by the
Mercedes-Benz Group.
DaimlerChrysler AG overall
reported its net income increased by more than 83 percent to a quarterly net of
$1.14 billion or $1.12 per share, from $623 million or 61 cents per share over
the same period in 2004. Revenues also increased by ten percent to $49
billion.
CEO Zetsche added that, despite
some setbacks and a pressing need to reorganize the Mercedes-Benz Group, he was
satisfied that DaimlerChrysler had made some significant progress over the
past year.
“Our earnings are still not where
we want them to be,” said Zetsche, who took over from Juergen Schrempp on Jan.1.
“We intend to grow profitably and to create added value over the long term
— for the benefit of our customers, employees, and shareholders,” he
said.
To that end, the Chrysler Group
plans to launch ten new models this year, including the Aspen SUV, Jeep Compass,
and Dodge Nitro, and is looking beyond the
“The Chrysler Group has to be more
present on international markets,” Zetsche said, adding the unit is targeting
Europe and
During 2005, the Chrysler Group’s
operating profit increased seven percent to $1.8 billion, in stark contrast to
the heavy losses posted by General Motors and Ford Motor Co.’s automotive units
in
Bodo Uebber, DaimlerChrysler’s
chief financial officer and member of the Board of Management, said that
earnings were hemmed in by the high costs for raw materials like steel and oil,
along with intensifying competition in Europe and “tough competitive conditions”
in the
“Of course, 2006 will not be an
easy year. Ongoing tough competition in car markets will be a major challenge,
especially in the
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