Better Than 2009: Chrysler Posts $652 Million Net Loss for 2010
Earlier today, Chrysler announced its operating results for the entire 2010 fiscal year -- its first full year out of bankruptcy protection. According to the automaker, it lost $652 million in that time frame -- an improvement, however, when compared to the $3.8 billion loss the company posted the previous year.
According to CEO Sergio Marchionne, the improvement was achieved primarily through improving manufacturing efficiency, increasing attention to product quality, and pushing new products to market.
"As Chrysler Group's brand displays at the Detroit Auto Show confirmed, the company has lived up to its promise to launch 16 all-new or significantly refreshed vehicles in the past 12 months," Marchionne said in a prepared statement. "All of these vehicles bear testimony to Chrysler's rebirth."
That said, those new products also cost Chrysler significant sums to redesign and launch, and also forced the automaker to drop production volumes of outgoing models while it ramped up for production of new vehicles. According to Marchionne, these factors cost the company some $84 million in the fourth quarter of 2010.
Although the automaker did manage to still post an operating profit of $198 million in the fourth quarter (a $460 million improvement over last year), that drop did bring Chrysler's fourth quarter losses to roughly $199 million.
Chrysler's year-end operating profit totaled nearly $763 million, but the difference between it and the net loss posted is largely attributed to interest payments tied to its $7 billion in government loans. Over the course of the entire year, the automaker paid nearly $1.23 billion in interest, including nearly $329 million in the fourth quarter alone.
Per the conditions of those loans, Chrysler's improved financial standing has allowed Fiat to increase its stake in the American automaker to a 25 percent. The company does, however, still have some $5.8 billion in outstanding debt owed to the U.S. and Canadian governments that needs to be repaid -- perhaps in part through a stock IPO later this year - before investing further.
"Given the positive comments we have received to date, it can safely be said that what Chrysler delivered last year, on both the product and financial fronts, surpassed many expectations," Marchionne said. "However, our job is not yet done. We have a lot of work ahead to fulfill our five-year business plan objectives."
Do you think Chrysler's 2010 financial results are impressive or disappointing? Let us know in the comments section below.