The Economy

Chrysler Swings to Profit in 2011

Feb. 1, 2012

CEO Sergio Marchionne declares that the automaker's 'house is in good order.'

Even after Chrysler emerged from bankruptcy reorganization summer 2009, there were murmurs that the embattled automaker might not survive in this cutthroat global economy, that the recession might have delivered the deathblow to the runt of the Big Three.

What a difference a year makes.

Proving the naysayers wrong, the new Chrysler Group LLC reported a preliminary net income of $183 million for full-year 2011, a dramatic improvement from its loss of $652 million in 2010.

The swing to the black includes a $551 million loss stemming from Chrysler's repayment of government bailout loans to the United States and Canada, some six years early, the company noted. Excluding the charge, adjusted net income for full-year 2011 was $734 million, beating the company's 2011 guidance.

"Chrysler is the surprising comeback kid -- again," commented Edmunds.com senior analyst Michelle Krebs. "When Chrysler emerged from bankruptcy, there were plenty of skeptics, but the automaker has proven them wrong.

"Since detailing its plan for the future in November 2009, Chrysler has done everything it said it would, creating an impressive recent track record and providing confidence that it will meet its 2012 goals."

The turnaround is another feather in the cap of Fiat SpA CEO Sergio Marchionne, whose company now holds a 58% stake in Chrysler.

Marchionne: 'We greet a new year of high expectations with our heads down.'
"The house is in good order. We are proud of the work we've done," said Marchionne, Chrysler's chairman and CEO. "Now we greet a new year of high expectations with our heads down, forging ahead and focused on executing the goals we've set for ourselves as a company." Chrysler reported fourth-quarter net income of $225 million, compared with a year-over-year loss of $199 million. Among the highlights of the automaker's full-year and fourth-quarter results, Chrysler reported:

Full-year net revenue of $55 billion, up 31% from 2010.
Fourth-quarter net revenue of $15.1 billion, up 41% year-over-year.
Full-year free-cash flow of $1.9 billion, driving cash at year-end 2011 to $9.6 billion, up from $7.3 billion a year prior.
Worldwide vehicle shipments of 2 million units for full-year 2011, up from 1.6 million units in 2010.

Josh Cable | Former Senior Editor

Former Senior Editor Josh Cable covered innovation issues -- including trends and best practices in R&D, process improvement and product development. He also reported on the best practices of the most successful companies and executives in the world of transportation manufacturing, which encompasses the aerospace, automotive, rail and shipbuilding sectors.

Josh also led the IndustryWeek Manufacturing Hall of Fame, IW’s annual tribute to the most influential executives and thought leaders in U.S. manufacturing history.

Before joining IndustryWeek, Josh was the editor-in-chief of Penton Media’s Government Product News and Government Procurement. He also was an award-winning beat reporter for several small newspapers in Northeast Ohio.

Josh received his BFA in creative writing from Bowling Green University, and continued his professional development through course-work at Ohio University and Cuyahoga Community College.

A lifelong resident of the Buckeye State, Josh currently lives in the Tremont neighborhood of Cleveland. When the weather cooperates, you’ll find him riding his bike to work, exercising his green thumb in the backyard or playing ultimate Frisbee.