By on July 31, 2010

“The only reason we are not making money on the net is that I pay interest on the borrowings I took from the government and I have money in the bank to cover that debt. Actually, against the Treasury we owe them nothing. We have enough cash to pay it all off. But you can’t run a business without cash, so it’s just a function of our capital structure. If we had taken those funds as equity as GM did, we would have been making money, net, right now.”

Sergio Marchionne, explaining the financial situation of Chrysler, according to Reuters. Come on, Sergio, you need to take your GAAP course. In America, we call this EBITA  and throw a big party. Chrysler is set to report second-quarter results on August 9.

Bonus quote: As far as a Chrysler IPO goes, no hurry for Sergio.

“I am waiting for GM to go first — they are bigger.”

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17 Comments on “Quote Of The Day: Chrysler Could Be Rich If There Wouldn’t Be That Nasty Mortgage...”


  • avatar
    topgun

    If we had taken those funds as equity as GM did, we would have been making money, net, right now

    What’s he talking about? Doesn’t the US Treasury own equity in Chrysler as well?

    • 0 avatar
      Lorenzo

      The Governments (US & Canada) have some small equity in Chrysler, but they gave 20% to Fiat to manage the company, and the majority of equity to the UAW in lieu of health payments Cerberus owed. Someone correct me if I’m wrong, but I believe the equity both countries hold is collateral for the loans.

  • avatar
    HerrKaLeun

    I think any company and person would be in better financial situation if they didn’t need to pay interest on money they borrowed.
    He got equity for free, he got a loan he wouldn’t have gotten from a private bank… only thing he didn’t get is interest-free.

  • avatar
    AaronH

    He is just another establishment parasite trying to fool the feeble-minded public school grads.

    • 0 avatar
      lilpoindexter

      Are you saying the feeble minded private school grads won’t be fooled?

    • 0 avatar
      mythicalprogrammer

      ….

      Tell that to the UC systems that have the most Nobel laureates of any university system. Some public school huh? They gotta be so dumb and feeble minded to get so many of those Nobel awards.

    • 0 avatar
      Morea

      Let’s dial up ol’ Wikipedia and check this out.

      The UC system has 13,335 faculty members and 37 Nobel laureates or 1 Nobel per 360.41 faculty members.

      Harvard has 2107 faculty members and 38 Nobel laureates or 1 Nobel per 55.45 faculty members.

      A Harvard faculty member is 6.5 times more likely to have a Nobel prize.

      By analogy, the USA has the most Noble prizes of any country but it is one of the most populous countries in the world and spends the most on research. Are American academics smarter than academics from the rest of the world? Don’t bet on it.

      PS Public education is great, the country couldn’t function without it! But as Farago would tell us, just because GM used to sell the most cars didn’t mean it was the most profitable.

  • avatar
    Da Coyote

    He could also make money of Chrysler had learned to make cars that would last more than a couple of weeks before falling apart.

    Shove it up your Obama, Chrysler. You and GM can suck eggs.

    No more of your junk for me.

  • avatar
    dastanley

    Yeah, that damn interest. Sucks to have to pay it back after they benefitted from our tax dollars. Poor babies.

  • avatar
    tparkit

    Chrysler’s net profit is nearly irrelevant to Fiat.

    Fiat took on Chrysler as a venture, and only because they got it for free. This gave Fiat three future benefits: (1) the possibility they might be able to do something with Chrysler’s distribution channels, and (2) becoming a Friend of Washington – a group for which very, very good things have been known to happen. (In exchange, Washington was rescued from a political problem, and Chrysler’s later failure will appear to have happened to someone else.)

    Now we come to the third benefit Fiat was aiming at: Cash throwoff (not net profit) from Chrysler. If Chrysler is going to fail, parasitic Fiat will suck it dry of cash before casting away the husk. This has always been key to Fiat agreeing to help Washington. As long as Fiat walks away with more than they put in, they win.

  • avatar
    AaronH

    Yes…The infantile American public school / TV watcher retards can never be fooled…That is why their politicians own them.

  • avatar
    MikeInCanada

    Sergio’s an accountant by profession. Kind of an embarrassing statement for the bean counters in general…..

  • avatar
    ZekeToronto

    Marchionne is a product of Canadian public schools (from age 13 on) and universities (U of Windsor and York U). And although he is a CGA, he’s also a graduate of Osgoode Hall Law School (at York). I’m guessing he had his lawyer hat on when he made the above remarks :-)

  • avatar
    MikeInCanada

    Marchionne went to York U!?

    I thought that it was him I saw on TV down at the G20 protests with the rest of the Liberal Arts department.

  • avatar
    ZekeToronto

    Hah! We’ll check the next batch of security photos that get released!


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