Chrysler Profitable In Two Years, Says CEO

October 11, 2009
Chrysler headquarters

Chrysler headquarters

The recently announced alliance with Fiat notwithstanding, Chrysler's current position in the market is regarded as precarious by buyers and analysts alike. New CEO Sergio Marchionne is more optimistic, however, stating that Chrysler will be profitable within the next two years.

Early next month Marchionne will divulge Chrysler’s five-year business plan, which he has revealed will include plans for a new initial public offering of stock as early as 2011. The plan will also lay out the schedule for Chrysler’s quarterly financial statements announcements, which the company now has to make because of its public ownership. Under the control of former parent Cerberus Capital Management Chrysler was listed as a private company so had no obligation to release financial results.

Marchionne isn’t the only one predicting profits for Chrysler. The financial sector seems to agree, with analyst Adam Jonas of Morgan Stanley predicting an operating profit of $841 million in 2010 and a net loss for the year of $169 million. For 2011 Jonas is predicting an operating profit of $2.48 billion and net income of $952 million--unimaginable numbers just a few months ago.

The tie-up with Fiat is expected to yield a bevy of efficient and attractive new products for Chrysler, but that will take at least two years to get up to full speed. In the mean time, Chrysler will have to forge ahead with its own restructuring and product plan.

[The Detroit News]

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