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Back In Black: Chrysler Reports First Profit In Two Years

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On: Fri, May 6, 2011 at 1:26PM | By: Chris Weiss

Back In Black: Chrysler Reports First Profit In Two Years

What a difference a couple of years (and a few billion dollars of public money) can make. After spiraling into bankruptcy and groveling to the U.S. government—not to mention a European namesake—for big bailout bucks, Chrysler has reported its first profit. In the first three months of 2011, Chrysler finally got to use some black ink, raking in $116 million of profit.

According to Detroit News, Chrysler hasn't recorded a profit since it rebounded from the depths of bankruptcy in 2009. With monies and interest owed to the U.S. government for $5.8 billion of bailout monies appropriated in 2009, Chrysler has struggled to keep its head above water ever since. But Auburn Hills plans to repay its obligations to the government by next month. The fact that it was able to make a profit while still meeting its debt obligations shows that it's moving in the right direction toward that goal. A quick comparison to the $197 million net loss during 2010's first quarter shows how far Chrysler has come.

The story provides a somewhat literal note for Chrysler's 'Made in Detroit' advertising campaign, which shows Detroit—the Motor City—rising from the depths of impoverishment and despair. With the help of new products, like the Chrysler 200 featured in that ad series, Chrysler was able to muscle through an analogous journey—from bankruptcy to profit.

Fiat SPA CEO Sergio Marchionne said of the turnaround: "Chrysler Group's improved sales and financial performance in the first quarter show that our rejuvenated product lineup is gaining momentum in the marketplace and resonating with customers."

It would appear that the injection of European blood in the form of the Fiat partnership helped Chrysler gain some traction. That's good news, because Fiat plans to increase its stake to 46 percent by summer and a controlling 51 percent by year-end.

Marchionne made clear that the turnaround will be more than a flash in the pan: "These results are a testament to the hard work and dedication of our employees, suppliers, and dealers, all of whom are helping Chrysler create a new corporate culture built on the quality of our products and processes, and simple, sound management principles."


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