Move over, Ford. Move over, GM. Now it's Chrysler's turn to post a quarterly profit for the first time in quite awhile. Chrysler, of course, has had a long history of financial problems, dating back to the 1970s. I can clearly remember when they made massive layoffs/reorganizations and got their first government loans in the early 1980s, under Lee Iacocca, who had just been fired by Henry Ford II....a horse's a** of a CEO if there ever was one. Chrysler, back then, came within a hair of bankrupcy, but just managed to survive, after a very difficult process of getting the loans....Iacocca explains the whole process in his book. Iacocca, though, was somewhat of a smooth-talker himself, and made, IMO, many false statements about the "New" Chrysler's vehicle quality back then.......it was just a bunch of slick TV marketing, and Chrysler products of that era turned out to be very poorly-built (believe me, I know...I owned some).

Fast-forward to today........of course, Chrysler DID fold, but a combination of government/taxpayer money and new ownership by Fiat seems to have made a difference.

http://autos.aol.com/article/chrysle..._lnk1%7C211833

Two years after it was escorted through bankruptcy reorganization by the White House and with the help of loans from U.S. and Canadian taxpayers, Chrysler has posted its first quarterly profit.

The Auburn Hills, MI automaker -- maker of Jeep, Dodge and Chrysler vehicles -- earned $116 million in the quarter, an improvement after losing $197 million in the same period last year. Revenue was up substantially by 35% to $13.1 billion, while sales of vehicles were up 18%.

Cash on hand is a key measure of an automaker's health because of the substantial capital needs of industrial companies. Chrysler said it had $9.9 billion in cash on hand as of March 31, an increase of $2.6 billion in three months, and $13.3 billion in debt.

Chrysler CEO Sergio Marchionne, who also serves as CEO of Italian automaker Fiat, which is allied with Chrysler, has announced the company will shortly refinance its $7.5 billion in outstanding loans with the U.S. and Canadian government with bank debt, paying back taxpayers who bailed out the company years ahead of schedule. Chrysler said it would repay the loans by the end of June by selling $2.5 billion in bonds and borrowing $5 billion at better terms than those dictated with the government loans.

"Chrysler Group's improved sales and financial performance in the first quarter show that our rejuvenated product lineup is gaining momentum in the marketplace and resonating with customers," Marchionne said in a statement. "These results are a testament to the hard work and dedication of our employees, suppliers and dealers, all of whom are helping Chrysler create a new corporate culture built on the quality of our products and processes, and simple, sound management principles."

Chrysler has been crawling back to profitability, but was kept in the red last year by the interest payments on the loans that were critical to its survival in 2009. The company had reported operating profits in each quarter of 2010, but those interest payments, which totaled $1.23 billion for the year, resulted in losses over all. Chrysler lost $652 million last year.

Looking ahead, the company, which is expected to do an initial public offering of stock by mid 2012, said it expects to earn $200 to $500 million for all of this year, meaning it could post additional money-losing quarters this year as well as profitable ones.

G.M., which went through government-led bankruptcy at the same time as Chrysler, earned $4.7 billion in 2010, and will report first quarter earnings later this week. Chrysler, though, was in worse shape than GM, and its new-product pipeline was impacted more adversely by the ownership of private equity firm Cerberus, and then the bankruptcy.

The company's passenger cars, though much improved under Fiat, are still under-performing its rivals, while pickup trucks and SUVs still account for most of Chrysler's sales--78 percent in the first quarter, compared with about 60 percent for GM and Ford. The all-new Jeep Grand Cherokee has been especially well received.

Chrysler is gearing up for a significant 2012 and 2013, a period in which it planned to introduce several new vehicles developed from scratch by Chrysler and Fiat design and engineering staffs working together. Those new vehicles are being built from Fiat engineering platforms that are being adapted for Chrysler vehicles. The automaker in the last few months has been rolling out numerous updated and improved cars and SUVs, but those have been mostly improved carry-over vehicles from when Chrysler was owned by Cerberus Capital Management and German automaker Daimler before that.

Cerberus was stripped of ownership of Chrysler in 2009 when the company hit the financial wall, and needed government help. To protect jobs in the already hard-hit Midwest, the White House Auto Industry Task Force directed funds from the Troubled Asset Relief Program (TARP) funds. Fiat was the only automaker that stepped up with interest in running Chrysler.

The auto industry bailout kept Chrysler, as well as General Motors, from going out of business or being broken up, as well as hundreds of auto suppliers and thousands of auto dealers that would have gone out of business as a result.

By the end of the year, Fiat expects to exercise an option that will give it 51% of Chrysler. Until the government loans are formally paid back, the U.S and Canada own a combined 10.8 percent of Chrysler. Chrysler is now 30-percent owned by Fiat. Fiat will increase that by 16% after the loans are repaid. Chrysler's majority owner is currently a trust fund set up to cover the cost of health care for hourly retirees.

 

from the ashes. I am eager to see what they will do. So far Ford continues to impress and GM is starting to get a little better.

 

I want a Challenger, but I'm too spooked by Chrylser's BAD reliability. Personal experience, 2011 GC, sold after 3K miles. Too much wrong with it with little to NO help from the dealer or manufacturer. I'll be steering clear of GM and Chrysler for many many moons. Nothing but bad experiences with both companies. After the fifth try, I'm done beating myself against a wall for no reason. Sticking to brands I trust that have not let me down.

 

UAW just called and wants their benefits back.

 

After looking at the new 200, they have a loooooong way to go.

 

Yes, Chrysler's interiors are improving by leaps and bounds (some are stunningly better than just a couple of years ago), but reliability remains a question mark. One of our own CL members here recently got burned with a new Jeep Grand Cherokee...a Chrysler product with one of the best new interiors of all.

As far as the Challenger goes, I hear you. I grew up with the original ones over 40 years ago, and almost ordered a purple (Plum-Crazy) R/T recently when they did a limited-run of them. But the prospect of spending 38-40K on something potentially poorly-built and unreliable just to get a retro-design and a trick-purple paint job I remembered from high school was just too much.....there are better ways, at my age, to spend automotive $$$$$.

 

Chrysler is still bad at reliability. I know so many people that have had so many issues with Chrysler, especially there transmissions.

 

But it's ok!

They're owned largely part by Fiat, an industry leader in reliab.......


wait, that's not right.

 

That's such a small, nearly insignificant profit (and for only 1 quarter) on revenue of $13.1 billion, obviously big financial problems are still being worked.

 

I agree that by modern corporate standards, it's small potatoes, but you have to walk before you can run.....and it's at least a start.

 

As much as Chrysler may begin turning a corner they needed to turn decades ago, the history of Chrysler and their lack of reliability will be very present in a lot of peoples' minds. For me personally, and people I know my age, can't ever see themselves buying a Chrysler. Chrysler will only have the aging population to a point.

The only reason they're improving their standards, frankly, is because they have to.

 

The reason for any improving standards is because Sergio Marchionne, Fiat's CEO, is demanding it. The previous owners at Mercedes and Cerebus simply didn't care much.......Marchionne does. Of course, it is true that Sergionne's own company (Fiat) has not exactly been the world standard for automotive reliability, but there are signs that he is addressing that, too. I was fairly impressed, quality-wise, with the Fiat 500 I recently reviewed, though its long-term reliability remains to be proved in the American market.

 

Company is complete and total FAIL.

While you can argue that GM had to be kept alive due to the size of it (which I disagree with ), there was ablsolutely zero excuse for Dodge/Chrysler to be bailed out.

Like IS SV mentioned...0.089 % profit...that is failure of epic proportions from a business perspective.

There isn't a business person alive that would seek that kind of ROI, but our governments were all over it.

 

Yes, but...in 20,000 miles this year, my Dodge has not given me a lick of trouble. I swore I would never own a chrysler/dodge, after my parents fiasco...but one drive in that new ram, and I was HOOKED.

Not saying I will only buy them from now on, far from it. But give them another shot. I drove a new 2011 Charger as a rental a few weeks ago. in 2010, I would not have even looked at them, but man that 2011, even in the SE trim with a 3.6L V6, is pretty fast and pretty nice inside.

Here is the BASE 2011 Charger, NOT the R/T model.













and let me tell you, that car was DEAD quiet inside. Not a lick of noise at any speed. I was quite impressed.

 

I'm glad your having good luck with your Ram Josh, but your individual experience is no more indicative of the brands reliablility than my issues with my X5 are reflective of BMW's reliability....oh wait?

Not every vehicle from any manufacturer will be problematic or ultra-reliable (Lexus included). However, the reporting from JD Power, CR, TrueDelta, etc. are fact based and do support that some brands can expect more issues than others.

Regarding the Charger, imo, it looks like azz and doesn't perform much better. Probably the car I've abused the most in the F.