Saturday, October 25th5.8°C
23888

Chrysler loses $690 million in first quarter on losses related to Fiat merger

DETROIT - Chrysler Group saw big sales gains in the first quarter thanks to the new Jeep Cherokee and Ram pickup, but it lost money because of charges related to its merger with Italian automaker Fiat SpA.

Chrysler posted a loss of $690 million for the January-March period. Without one-time costs of $1.2 billion, the company's net income more than doubled to $486 million.

In January, Fiat paid $3.65 billion to a union-run health care trust to acquire Chrysler's remaining shares. The two companies are in the process of combining to form Fiat Chrysler Automobiles, which will be based in London but maintain significant operations in both Turin, Italy, and Auburn Hills, Michigan. Chrysler Chief Financial Officer Richard Palmer said Monday that the combined company expects to list its shares on the New York Stock Exchange in the fourth quarter of this year.

As part of the merger, Chrysler agreed to pay $700 million to upgrade its factories. The company took a $672 million charge in the first quarter to meet those commitments.

It also booked a $540 million non-cash loss for refinancing a 2009 note issued to the union-run trust, which pays for retirees' health care. Palmer said Chrysler expects to save $200 million per year before taxes thanks to lower interest rates.

Chrysler said profits were also hit by the weakening Canadian dollar, increased advertising spending and $100 million in recall costs. Under pressure from the government, Chrysler agreed last year to recall 1.56 million older-model Jeep Liberty and Jeep Grand Cherokee SUVs because of a risk of fires if they're hit from the rear. The company is installing trailer hitches on any vehicles that don't have them.

Chrysler's worldwide vehicle sales jumped 10 per cent to 621,000.

In the U.S., where Chrysler sells 75 per cent of its cars and trucks, sales rose 11 per cent, far outpacing the 1 per cent average gain for the industry.

Chrysler saw strong sales of the new Jeep Cherokee SUV, which went on sale at the end of last year. Ram pickup truck sales were also up 25 per cent in the U.S.

Dodge and Chrysler brand sales fell, but the company expects to reverse that with a new Chrysler 200 midsize sedan, which is arriving at dealerships now. Updated versions of the Dodge Charger and Challenger also go on sale later this year.

Palmer said Chrysler remains on track to earn $2.3 billion to $2.5 billion this year outside of one-time items. It expects full-year revenue of $80 billion.

The Canadian Press


Read more Business News

23015


Recent Trending




Today's Market
S&P TSX14543.82+56.99
S&P CDNX805.45-3.15
DJIA16805.41127.51
Nasdaq4483.715+30.923
S&P 5001964.58+13.76
CDN Dollar0.8901-0.0003
Gold1231.20+2.10
Oil81.02-0.73
Lumber336.40+6.80
Natural Gas3.631+0.009

 
Okanagan Companies
Pacific Safety0.105-0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.15-0.02
Cantex0.07+0.015
Anavex Life Sciences0.194-0.004
Metalex Ventures0.045+0.005
Russel Metals33.39+0.23
Copper Mountain Mining2.03-0.05
Colorado Resources0.145+0.005
ReliaBrand Inc0.012-0.001
Sunrise Resources Ltd0.05-0.01
Mission Ready Services0.445+0.035

 



23028

FEATURED Property
20539686076 Highway 97 S
4 bedrooms 3 baths
$838,888
more details
image2image2image2
Click here to feature your property
Please wait... loading


What I learned in China

Photo: ContributedI will never be an expert on China. It is just too big, too complex and too old with layers of history and meaning that would take several lifetimes to unravel. As I said to my hosts...


We can get on together

I was in LA this week. I witnessed such crazy and unusual circumstances as I strolled along Hollywood Blvd and Sunset Blvd. A far cry from sleepy Peachland in the Okanagan! The strange thing was, I f...


Weakening global growth worries

The Big Picture Growth worries persist Worries about weakening global growth and its potential impact on the US economic recovery roiled markets around the globe this week. Europe continues to be the ...

_








Member of BC Press Council


22771