Chrysler suffers smaller quarterly loss
A year after emerging from bankruptcy protection, Chrysler is stanching its losses and seeing demand for its cars and trucks rise. But it's far from healthy, and its CEO says the company has more tough work ahead.
Chrysler Group LLC said Monday that growing car and truck sales helped it narrow its second-quarter loss to $172 million, compared with a first-quarter loss of $197 million.
The U.S. and Canada are Chrysler's primary markets, and both have seen higher demand for cars and trucks since a recession-driven slump last year. Chrysler's revenues rose 8.2 percent to $10.5 billion compared with the first quarter, largely because of a jump in sales. But many of those sales were to rental-car, government and corporate fleets, which are less profitable than sales to individual buyers.
Chrysler was in bankruptcy protection for much of the second quarter last year. Since leaving Chapter 11 last June, it has been run by Italian automaker Fiat SpA.
Chrysler got a boost in the last few months with the release of the 2011 Jeep Grand Cherokee, the first new vehicle Chrysler has released since Fiat took over. It plans more than a dozen new and refreshed car and trucks in the latter half of 2010. They include a revamped Chrysler 300 sedan and the U.S. debut of the Fiat 500 minicar, a small car Chrysler hopes will catch on with Americans.
Chrysler's U.S. market share has climbed to 9.4 percent, but that's still below the 12.9 percent in the second quarter of 2007, the last time the company reported second-quarter results.
Chrysler posted an operating profit of $183 million in the March through June period, up 28 percent higher from the first quarter.
Chrysler signals change in stance
After almost a year of taking a hard line with rejected dealerships, Chrysler Group changed the tone last week and offered to reinstate 50 dealerships.
The company also said it will enter settlement talks with an unspecified number of rejected dealerships and disclosed that 36 already have been reinstated nationwide.
Chrysler still favors dealerships that sell all four of its brands: Chrysler, Dodge, Jeep and the recently added Ram truck brand. All 50 offers of reinstatement are to stores selling all those brands.
All the problems have not been sorted yet. Lawyers representing dealers say Chrysler hasn't budged in its approach to arbitration.
Viper Club of America to get spare parts from Chrysler
A deal has been struck between Chrysler and the Viper Club of America to transfer a quantity of excess and blemished parts, as well as some collectibles, to the non-profit association that serves about 25,000 Viper owners. The inventory includes everything from body panels painted in discontinued colors to scratched wheels the factory couldn't sell. Also included are the tooling to reproduce certain parts in the future and memorabilia like the body panels from the Viper Competition Coupe that raced a U.S. Air Force F-16 fighter jet.
Some parts will be kept in museums, but the spare parts will be sold through a new company founded by the club called Viper Parts of America, Inc., the proceeds from which will go towards supporting club activities.