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Chrysler announces $183 million operating profit

by David Zatz on

The following email was broadcast to Chrysler employees this morning, after announcing an operating profit (with a net loss of $172 million for the quarter; in the first quarter there was also an operating profit with a net loss of $197 million).

Dear Colleagues,

Last November, we publicly unveiled a five-year business plan that is comprehensive, ambitious and serious. We entitled the plan, “From Chapter 11 to Chapter 1,” as it represented a new beginning for Chrysler Group LLC. At the time, we made it clear that we would be accountable for delivering what we promised.

Chrysler Group today released financial results for the second quarter of 2010 and I’m pleased to tell you that we remain on track to attain our goals for this year. We achieved an operating profit of $183 million in the quarter, bringing our total operating profit for the first half of the year to $326 million. The Q2 Operating Profit improvement of $40 million, compared to Q1, was driven primarily by increased vehicle sales.

We increased our cash on hand by $474 million in Q2, which strengthened our cash position to $7.8 billion and brings our total available liquidity to more than $10 billion. This liquidity gives us the ability to develop the distinctive, quality products that are the foundation for building strong brands.

We sold 407,000 vehicles in Q2, an increase of 22 percent from the first quarter. U.S. market share improved from 9.1 percent to 9.4 percent. Canadian market share was a strong 12.9 percent, with sales increasing 32 percent from the first quarter.

It was a quarter in which we built important momentum, highlighted by the launch of the all-new 2011 Jeep Grand Cherokee and the July 30 visit by President Obama. Opinion leaders have overwhelmingly praised the capability, versatility and craftsmanship of the Grand Cherokee, and the Insurance Institute for Highway Safety named it a Top Safety Pick, the organization’s highest rating. We also added a second shift of production at Jefferson North, with about 1,100 employees hired. And, we announced that the Sterling Heights Assembly Plant, which was scheduled to close after 2012 will remain open beyond that date — adding nearly 900 jobs on a second shift in Q1 of 2011.

During the second quarter we made two investments totaling $343 million in our transmission operations in Kokomo, Ind., which will result in nearly 1,600 jobs being created or retained.

Looking forward, most of our 16 all-new or significantly refreshed products for 2010 will be launched in the second half of year, including the all-new Chrysler 300, Dodge Charger, Dodge crossover, the Chrysler Sebring replacement and the iconic Fiat 500.

It is critical that we stay focused and build on our momentum without assuming for a moment that our future is assured. It will take a great deal of commitment and discipline to achieve the transformational change we seek — the kind of change that will be long lasting.

Our efforts will not always show immediate results. But we can build a strong industrial foundation if we continue to work with humility and hold ourselves to rigorous standards. I appreciate how hard you are working and I hope you are as encouraged as I am by these early signs of success. I am confident we will continue to move toward our ultimate goal of creating a sustainable enterprise if we stick steadfastly to the course we have set.

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