By on June 13, 2010

Last Friday, Chrysler celebrated the first anniversary of its miraculous emergence from bankruptcy. What did the employees get in observance of this occasion? A watch? A bonus?

They received an email.

From Sergio Marchionne himself. In the email (a copy of which had been forwarded to Reuters), Sergio assures the worker bees that Chrysler is generating the cash needed to rebuild its product portfolio, that sales continue to gain momentum, and that the company’s alliance with Fiat is “taking root” by cutting costs and expanding revenue from outside of North America.

Cash is key to Marchionne’s ambitious five-year turnaround plan for Chrysler. Fiat could use some cash itself.

Chrysler caused bulging eyes amongst analysts when the company reported a $143m first-quarter, operating profit driven by cost-cutting and higher sales volume.

“There is still a very long road ahead in our drive to rebuild our business and to deliver on our promises to repay the American and Canadian taxpayers who gave us a second chance,” said Sergio. Thanks for reminding us.

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27 Comments on “A Marchionne Miracle! Chrysler Generates Cash...”


  • avatar

    G’ day Bertel!

    So, there’s light at the end of the tunnel. Is Mr. Marchionne proving his bacon?

    As a declared Fiat fan, I’m keeping my fingers crossed.

    Stupendo!

  • avatar

    The bankruptcy of GM and Chrysler and the near Bankruptcy of Ford was due to the Credit Crisis. If people can’t get loans for whatever reason, they can’t buy cars…its as simple as that. I own a Chrysler 300 and its a good car with an interior no worse than a Nissan Maxima or a Honda Accord. It doesn’t suprise me to see 300′s and Chargers selling well. Its a good car, its a large car and its not ridiculously expensive.

    While the japanese automakers got assistance from their governments silently, the American companies were up against Republicans trying to break the backs of the unions. America is one of the few countries I know of where a bunch of people ON THE TAKE are trying to undermine their country’s own job producing/product exporting infrastructure.

    • 0 avatar
      forraymond

      DAMN RIGHT!

    • 0 avatar
      pgcooldad

      DAMN RIGHT II, !! We all know about “loans” that are made in a certain country.

    • 0 avatar
      Hanksingle

      I know this place is touchy around the idea of trolling, and I am not trying to inflame you or cause a rift, but I think you need to do some serious deep thinking about the situation you’re describing.

      Your statement removes responsibility for making awful cars and running a terrible business off the shoulders of Chrysler and GM (we’ll leave Ford out for fixing their own mess), suggests that unions have nothing to do with the state of the American auto industry and theorizes that it’s really the Republicans and Wall Street that put us here?

      I am about as staunch a liberal as has been made in this country, but you are talking folly. The auto-industry had a rent in it’s side long before the housing market crashed, let’s not try to revise history and turn this into a red vs blue cat-fight. If you’re mad at the government, be mad at the whole thing – don’t let bad companies off the hook for doing bad business.

    • 0 avatar

      While the UAW did make concessions and GM & Chrysler’s costs have gone down, I worry that their inefficient work rules remain.

    • 0 avatar

      wall Street bought off both the Democrats and Republicans. Both parties are merely tools of Wall Street and by extenssion, corporations.

      These entities are systematically stealing American jobs and giving them to Asia.

      They’d rather make slaves of the Chinese and Indians than pay Americans federal minimum wage.

    • 0 avatar

      Haha, from 2000-2005 GM’s debt increased from 10 to $40 billion, and its market cap was devalued by 70%. Damn that 2007 housing crash.

    • 0 avatar

      Chrysler’s products were mostly garbage before the 2008 crisis, and many of them still are.
       
      If any corporation deserved to go down during that crisis, it was Chrysler.
       
      And the Chrysler 300′s interior is no worse than that of an Accord…from 1992.

  • avatar
    mythicalprogrammer

    Just a repeat of President Jimmy Carter’s loan to Chrysler. It’s going to get pay back, maybe not all, but it’s well worth the jobs the bailout saved.

  • avatar
    BuzzDog

    Hopefully under Marchionne’s leadership Fiat can avoid the dreaded “Jeep Jinx.”

  • avatar
    Ron

    It is easy to generate cash when you aren’t reinvesting in yourself. For those of you who haven’t had accounting, depreciation and amortization are among the costs deducted from revenues to produce income before taxes. So, if you don’t use this money to replace antiquated tooling or to modernize or expand your plants, you can be cash flow positive. A switch from negative to positive cash flow is one of the signs of an impending bankruptcy (the company is not reinvesting in itself in order to meet demands from creditors for payment).

    • 0 avatar
      Polishdon

      “It is easy to generate cash when you aren’t reinvesting in yourself. For those of you who haven’t had accounting, depreciation and amortization are among the costs deducted from revenues to produce income before taxes. So, if you don’t use this money to replace antiquated tooling or to modernize or expand your plants, you can be cash flow positive”.

      Nice Statement, but probably FALSE. If they were doing as you state, there would be no “Redesigned” models on the market and seen in spy photos.

      If Fiat’s plan was to dump Chrysler, why waste the money ? Just as a current example: What about the new 8 spped transmission plan announced last week to replace the Mercedes sourced model?

    • 0 avatar

      Isn’t Daimler yanking away the M-B transmission, forcing Fiasler to punt on a replacement?

      Weren’t the Grand Cherokee and nextgen Charger/300 already well on the way to production by the time Cerberus divested itself from the Mopar gang?

      What about the Sebring/Nassau? Looks like it will be little more than reskin/interior redo, with very little substantial change in the weak platform itself. (Read: not too expensive.)

      How about a Liberty replacement? Caliber? Dakota?

      Fiat isn’t “investing” in Chrysler. It’s letting programs already underway run their course, and hoping for the best. The only real investment — the transmission — is out of sheer necessity. It’s not like they can sell (rental) cars without one.

      So far there remains little evidence that Fiat isn’t merely bidding its time until it can either sell off the battered remnants of Chrysler/Jeep, or convert nearly entire line to Lancia/Fiat clones. Not a very optimistic picture either way…

  • avatar
    50merc

    That ad is a major WTF moment. It starts out with tired (and tiring, and inaccurate) feminist whines about oppression of women. Then the female narrator says because of all the s–t she’s taking, she won’t pay for the guy’s gas hog. It concludes with footage of a rampaging Dodge. Is the Dodge the guy’s toy? Is it the way the woman celebrates her independence? Is this commercial a splice of two messages, one originally intended for NOW members and the other for NASCAR fans?

    Dodge, I have a suggestion for further cost-cutting. Fire your ad agency.

    • 0 avatar
      NulloModo

      You do realize that the above video is not a real ad, correct? It’s a spoof of this Dodge ad from the Superbowl.

    • 0 avatar
      holydonut

      Haha, I guess a real spoof would have been a talking dog and its affinity towards eating poop and riding in the car.

      I still think that if Chrysler had paid any bonuses or gave gifts that people would have criticized that as a waste of money – because sending emails is cheaper. Seems like a catch-22 all around.

    • 0 avatar
      educatordan

      @50Merc and NulloModo

      Yeah it’s a spoof, but thank god Fiatslers ads have improved. (I mean the recent patriotic/we build cars for car people ads.) I honestly hated the “Man’s Last Stand” ad or whatever that one during the superbowl was called. If I buy a Charger or a 300 it’s going to be because I’m with a woman (I know she’s a rare one) who when she says; “Buy what you want to buy.” She means it, it’s not a trap. If I wanted to buy something as some kind of “passive-agressive, henpecked husband, get back at my wife, sort of thing I wouldn’t have gotten divoriced from my first one!

    • 0 avatar
      50merc

      Well, NulloModo, the joke’s on me! My only defense is that nowadays there’s a thin line between reality and parody. But you know, when I went and looked at the real “last stand” ad I decided it’s wretched too.

    • 0 avatar
      ClutchCarGo

      Like 50merc, I too watched the ad and thought WTF? It’s a measure of the absurdity of ChryCo advertising of late that neither of us immediately pegged it as a spoof.

  • avatar
    tced2

    If the “shotgun” bankruptcy was done correctly, Chrysler should have been able to make their operations right-sized for their current business. Making some money after that adjustment should not be surprising.

  • avatar
    SherbornSean

    This was a good commercial, but I would have liked it more if the women had been British and the Charger had run them over. And maybe these Britchick could have had “BP” tramp stamp tattoos. And the guys driving the Chargers asked if that thang got a hemi, and then maybe the car could turn into a robot that ruled the world. That would be awesome.

  • avatar

    I don’t understand why the employees would deserve anything beyond an affirmation that Chrysler is headed in the right fiscal direction. These are days when an actual job is the real reward for UAW guys. The idea that an email was somehow insufficient baffles me. Over-compensation for employees is the root of Greece’s problems and the possible basis for a larger economic crisis in Europe.

  • avatar

    Actually it’s the THIRD chance from the American taxpayer. See also 1979.

    John


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