Chrysler Continues the Detroit Resurgence
Wednesday saw Chrysler report its first annual profit in seven years. Not since 2005 has the company, the only non-traded auto manufacturer in the Detroit “big 3”, been able to report a profit, and it comes only two years after a federal bailout, a bankruptcy filing and a takeover by Fiat.
According to CNN, the company (which includes the Chrysler, Dodge and Jeep brands), pulled in $183 million last year. When you sit that alongside the 2010 loss of $652 million, it is obvious that Chrysler is doing something very right.
It is not only them. While Detroit is seeing an unseasonably warm start to the year, with the sun unfathomably shining in February and temperatures reaching the 50's, there is a warm glow surrounding the big 3 that obviously also includes Ford (NYSE: F) and General Motors (NYSE: GM). 2012 has already seen Ford report its biggest profit since 1998. GM will report later in February, and the company that went through bankruptcy and bailout with Chrysler in 2009 is expected to complete the hat trick and report hugely improved earnings.
If that happens, it will be the first time since 2004 that the big 3 are profitable at the same time. That is a huge achievement and, during an economic period where there is little to celebrate at present, this recovery certainly is something that Americans can feel extremely positive about.
Chrysler, for its part, is making the bold prediction that even better times are ahead, forecasting that it will make $1.5 billion this year, with an 18 percent jump in revenue. CNN said that Chrysler took a charge of $551 million during 2011 related to refinancing to pay off the higher-interest loans received from the U.S. and Canadian governments during the bailout.
During 2011, Chrysler posted a 24 percent increase in U.S. auto sales. That led to a 22 percent increase in worldwide sales to 1.86 million vehicles. Meanwhile, revenue went up to 31 percent to just under $55 billion.
Fourth quarter net income is $225 million, which reads a lot better than the net loss of $199 million the previous year.
The positive vibes just keep flooding in too. For the first time since 1988, the big 3 all gained U.S. market share. Following a successful Auto Show in Detroit, there is a genuine and well-earned feeling of positivity around the U.S. auto industry.
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