Chrysler Rises From Ashes - Again
Automaker Top Seller in Canada
By Grace Macaluso, The Windsor Star
Chrysler Group continued its Lazarus-like performance in Canada and the United States Wednesday, posting its first annual net profit since emerging from bankruptcy in 2009 and generating record-setting, double-digit monthly sales gains on both sides of the border.
"It's been an exceptional year for Chrysler in terms of the achievements of its own ambitions," CEO Sergio Marchionne said during a financial results conference call. "We've delivered on everything we've told you we'd be doing as far back as 2009."
Chrysler posted a net profit of $183 million for 2011 - up from a net loss of $652 million in 2010. Net revenue for the year was $55 billion, up 31 per cent over last year.
In Canada, Chrysler became the top-selling automaker last month, knocking Ford out of top spot, with a sales gain of 22 per cent compared to the same period last year.
The only other time Chrysler ranked No. 1 was in February 2009, said LouAnn Gosselin, spokeswoman for Chrysler Canada. In the U.S., sales skyrocketed 44 per cent.
The upbeat results prompted a promise by Marchionne to award performance bonuses to its global salaried employees as well as its unionized workers in the U.S. The UAW has a profit-sharing agreement in its collective agreement.
"This is a reward that you have earned," Marchionne said in an email to Chrysler employees. "The more difficult task, the more satisfying it is to overcome all obstacles. You have been to hell and back, and you defied predictions of our demise. Your efforts rewrote history that so many naysayers have forecast."
Marchionne would not disclose the amount employees would receive, but the Detroit Free Press reported that the more than 26,000 hourly workers each would get a payment of more than $1,500, based on their collective agreement's profit-sharing formula.
During the conference call, Marchionne singled out Chrysler Canada CEO Reid Bigland, who also is in charge of the Dodge Brand and U.S. sales.
"I take this opportunity to compliment Bigland and his team in the U.S. in having delivered an outstanding set of results for January," said Marchionne. "I think we're looking for similar results in February and every month going forward."
While he applauded Chrysler's stellar numbers, Canadian Auto Workers union president Ken Lewenza said they weaken Marchionne's call for lower labour costs in upcoming contract talks.
"The reputation of Chrysler is changing, so I give Marchionne sincere compliments for his leadership," said Lewenza. "But, I continue to get frustrated with the ongoing demands for workers to make sacrifices at a time when companies are going to do incredibly well. We have a collective agreement, it expires this fall, and we're going to protect the interests of our members."
Michelle Krebs, senior analyst at Edmunds.com, said Chrysler has again exceeded its own expectations.
"Chrysler is the surprising comeback kid - again," said Krebs. "When Chrysler emerged from bankruptcy, there were plenty of skeptics, but the automaker has proven them wrong. Since detailing its plan for the future in November 2009, Chrysler has done everything it said it would, creating an impressive recent track record and providing confidence that it will meet its 2012 goals."
Chrysler said January's sales jump in the U.S. was largely driven by demand for the Brampton-assembled Chrysler 300 flagship sedan, Chrysler 200 mid-size car, Jeep brand models and Ram pickup trucks.
Marchionne said an initial public offering won't take place until sometime in 2013, the year Chrysler launches a product line based on its merger with Fiat.
"This year, we are re-entering the competitive compact segment with the Dodge Dart," he said. "The real story will unfold in 2013 and is going to start with the Detroit Auto Show, when you'll be able to see all the work that has been applied by our people in terms of redeveloping a product lineup that will allow us to compete internationally.
"It's not going to be a walk in the park in 2012, but I think we have all the elements in place. I think the leadership team is in sound shape and the integration with Fiat continues to go on well, as you can see from the results in the U.S."
Meanwhile, Ford saw Canadian sales rise five per cent last month compared to the same period last year. In the U.S., sales rose seven per cent.
General Motors experienced an 11 per cent sales drop in Canada and a six per cent decline in the U.S.
Honda Canada saw sales more than double to more team 9,100 vehicles and Toyota Canada posted it best January sales so far with an 18-per-cent gain.
"We are proud to report TCI's best January in history and we thank our customers," said Tony Wearing, senior managing director at Toyota Canada. "We're also looking forward to bringing Canadians 18 more new or refreshed vehicles in the coming months."
January light vehicle sales in Canada rose 15.4 per cent compared to the same period last year. The Seasonally Adjusted Annual Rate tracked at 1.7 million units, the highest level in four years, beating analysts expectations, according to auto industry expert Dennis DesRosiers. Total sales last month were 97,500 units.
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