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Chrysler’s Q3 profit, Sergio’s letter

by Bill Cawthon on

Chrysler Group LLC reported that its net income rose 22%, to $464 million for the quarter — more than its $381 million profit in Q3 2012. Net income for the first nine months of 2013 totals more than $1.1 billion.

This marks the ninth consecutive quarter in which the company has posted positive net income.

Net revenue in Q3 was $17.6 billion, up 13.5% from the same quarter in 2012. For the the first three quarters of this year, Chrysler Group’s net revenue totals $50.9 billion.

Third Quarter Modified Operating Profit was $862 million, or 4.9% of net revenue, versus $706 million reported in the Q3 2012. The 22% increase was primarily due to higher sales and pricing, partially offset by higher industrial and launch-related costs and vehicle content enhancements.

Through the end of September, modified operating profits totaled $2.1 billion.

CEO Sergio Marchionne wrote to the Chrysler staff:

Sergio Marchionne small 2011Earlier this month, we introduced a new Chrysler brand commercial in the U.S. that expresses our conviction that there are “no shortcuts” to achieving greatness. The television spot features Detroit Tigers slugger Miguel Cabrera to illustrate how hard work and dedication are essential to becoming the best.

Your hard work and dedication are continuing to make a difference, as shown today with the release of our preliminary third-quarter results. Net income came in at $464 million, a 22 percent increase from the same period a year ago, representing our ninth straight quarter of profitability.  Modified operating profit also increased by 22 percent, reaching $862 million in Q3.

Compared with the same period a year earlier, worldwide shipments were up 6 percent to 593,000 vehicles. And this month we launched the 2014 Jeep Cherokee after ensuring that this important vehicle will meet world-class quality standards from the start. We sold 603,000 vehicles in the third quarter, up 8 percent from the year before, and we finished the quarter with 42 consecutive months of year-over-year sales growth in the U.S. and 46 months in Canada.

We continue to invest in our future, announcing plans to spend $52 million to increase production of the important four-cylinder Tigershark at two Michigan engine plants, Trenton and Dundee. This brings our total investments in U.S. and Canadian facilities to more than $5.2 billion since June 2009.

We also celebrated the production launch of the Ram ProMaster van at a new assembly plant in Saltillo, Mexico, and announced the addition of a new production line to assemble Tigershark engines at the Saltillo North Engine Plant. The two Saltillo projects represented investments of more than $1.2 billion.

I want to thank you for the focus and commitment that you have brought to the task of moving Chrysler Group forward in an incredibly competitive environment. The same level of dedication is the single most important factor that will enable us to become the very best. There truly are no shortcuts on the road to greatness, and the most important goals are often the hardest to achieve. Let’s stay humble and continue to work with resolve and determination to create something in which we can all take pride.

Bill Cawthon grew up in the auto industry in the 1950s. His Dad worked for Chrysler and Bill spent a number of Saturdays down on the plant floor at Dodge Main in Hamtramck. Bill is also the U.S. market correspondent for just-auto.com, a British auto industry publication, and a member of the Texas Auto Writers Association, which has named the Jeep Grand Cherokee the “SUV of Texas” several times and named the Ram 1500 as the “Truck of Texas” two years running.

Bill has owned five Plymouths (including the only 1962 “Texan”), one Dodge and one Chrysler and is still trying to figure out how to justify a Wrangler. He also has owned at least one of every 1:87 scale model of a Chrysler product. You can reach him directly at (206) 888-7324 or by using the form.


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