Chrysler sees profits rising
#1
08-13-2005, 01:08 AM
Chrysler sees profits rising
LaSorda predicts earnings gains this year and next, helped by worldwide sales growth.
By Brett Clanton / The Detroit News
SALTILLO, Mexico -- Unlike its larger Detroit rivals, DaimlerChrysler AG's Chrysler Group is expected to post slightly higher profits this year and again in 2006, according to the automaker's designated chief executive officer.
"It's no longer about maintaining momentum, it's going full throttle ahead," Tom LaSorda, who will become Chrysler's CEO Jan. 1, said Thursday.
LaSorda spoke to reporters on a jet enroute to the automaker's Saltillo, Mexico, factory, where Chrysler launched production of the 2006 Dodge Ram Mega Cab pickup.
He will take over from Dieter Zetsche. In late July, Zetsche was named CEO of DaimlerChrysler after the resignation of Juergen Schrempp.
In his first extended interview since his appointment, LaSorda said he had no "massive changes" in store for Chrysler and shot down recent speculation that Chrysler could be spun off from the rest of the group.
"There are no plans whatsoever to spin off Chrysler," he said.
After Schrempp announced plans to step down, some financial analysts speculated that the new management might feel pressure to break up the automotive conglomerate that Schrempp built to boost the company's share price, which has lost roughly half its value since peaking in 1998.
Chrysler still faces challenges to match the manufacturing efficiency of Japanese automakers by 2007 and modernizing dealerships, but LaSorda said the company was making progress in both areas.
After earning $1.9 billion in operating profit in 2004, he said the automaker will improve earnings at least through the end of 2006, helped in part by growing sales in other parts of the world.
Over the next three months, Chrysler will decide which products to build at a new Beijing factory where it assembles Jeep vehicles, LaSorda said. It may include a minivan to be sold in China, he said.
Chrysler was the first automaker to form a venture partnership with a local Chinese company but its growth in China now trails General Motors Corp. and other rivals that have rapidly built up their Chinese operations.
At the same time, the Auburn Hills-based automaker wants to boost sales in Europe, where it now has less than 1 percent of the market. LaSorda said new vehicles will be designed in a way that will let the company equip them with diesel engines or right-hand-drive for markets such as Britain.
Chrysler returned to profitability last year after emerging from a three-year restructuring that shed about 40,000 jobs and led to the sale or closure of half a dozen plants. And it posted its first U.S. market share gain since 1998.
In contrast, a sharp decline in SUV sales, higher discounts and high fixed costs have produced losses at the North American operations of General Motors Corp. and Ford Motor Co.
Chrysler's success last year was fueled by the introduction of nine new models, including the Chrysler 300 and Jeep Grand Cherokee, that were launched as part of a plan to bring 25 new vehicles to market between 2004 and the end of 2006.
LaSorda said the automaker will have "at least 10" new vehicles in showrooms in 2006 -- the most ever in a single year for Chrysler.
But the focus on Thursday was the new Dodge Ram Mega Cab pickup, which Chrysler says has the largest passenger cabin in the industry and the potential to lift sales of its all-important Ram lineup.
Ram sales are down 5.4 percent this year because of new competition and rival discount programs by other automakers. But the Mega Cab, which boasts ample space for six adults and a slightly larger cab than Ford's F-250 Crew Cab, could create new buzz for the Ram lineup.
Chrysler invested $210 million in the Saltillo plant to build the Mega Cab.
"It's not going to revolutionize the pickup truck segment as we know it," said Erich Merkle, an industry analyst with IRN Inc. in Grand Rapids.
You can reach Brett Clanton at (313) 222-2612 or bclanton@detnews.com.
By Brett Clanton / The Detroit News
SALTILLO, Mexico -- Unlike its larger Detroit rivals, DaimlerChrysler AG's Chrysler Group is expected to post slightly higher profits this year and again in 2006, according to the automaker's designated chief executive officer.
"It's no longer about maintaining momentum, it's going full throttle ahead," Tom LaSorda, who will become Chrysler's CEO Jan. 1, said Thursday.
LaSorda spoke to reporters on a jet enroute to the automaker's Saltillo, Mexico, factory, where Chrysler launched production of the 2006 Dodge Ram Mega Cab pickup.
He will take over from Dieter Zetsche. In late July, Zetsche was named CEO of DaimlerChrysler after the resignation of Juergen Schrempp.
In his first extended interview since his appointment, LaSorda said he had no "massive changes" in store for Chrysler and shot down recent speculation that Chrysler could be spun off from the rest of the group.
"There are no plans whatsoever to spin off Chrysler," he said.
After Schrempp announced plans to step down, some financial analysts speculated that the new management might feel pressure to break up the automotive conglomerate that Schrempp built to boost the company's share price, which has lost roughly half its value since peaking in 1998.
Chrysler still faces challenges to match the manufacturing efficiency of Japanese automakers by 2007 and modernizing dealerships, but LaSorda said the company was making progress in both areas.
After earning $1.9 billion in operating profit in 2004, he said the automaker will improve earnings at least through the end of 2006, helped in part by growing sales in other parts of the world.
Over the next three months, Chrysler will decide which products to build at a new Beijing factory where it assembles Jeep vehicles, LaSorda said. It may include a minivan to be sold in China, he said.
Chrysler was the first automaker to form a venture partnership with a local Chinese company but its growth in China now trails General Motors Corp. and other rivals that have rapidly built up their Chinese operations.
At the same time, the Auburn Hills-based automaker wants to boost sales in Europe, where it now has less than 1 percent of the market. LaSorda said new vehicles will be designed in a way that will let the company equip them with diesel engines or right-hand-drive for markets such as Britain.
Chrysler returned to profitability last year after emerging from a three-year restructuring that shed about 40,000 jobs and led to the sale or closure of half a dozen plants. And it posted its first U.S. market share gain since 1998.
In contrast, a sharp decline in SUV sales, higher discounts and high fixed costs have produced losses at the North American operations of General Motors Corp. and Ford Motor Co.
Chrysler's success last year was fueled by the introduction of nine new models, including the Chrysler 300 and Jeep Grand Cherokee, that were launched as part of a plan to bring 25 new vehicles to market between 2004 and the end of 2006.
LaSorda said the automaker will have "at least 10" new vehicles in showrooms in 2006 -- the most ever in a single year for Chrysler.
But the focus on Thursday was the new Dodge Ram Mega Cab pickup, which Chrysler says has the largest passenger cabin in the industry and the potential to lift sales of its all-important Ram lineup.
Ram sales are down 5.4 percent this year because of new competition and rival discount programs by other automakers. But the Mega Cab, which boasts ample space for six adults and a slightly larger cab than Ford's F-250 Crew Cab, could create new buzz for the Ram lineup.
Chrysler invested $210 million in the Saltillo plant to build the Mega Cab.
"It's not going to revolutionize the pickup truck segment as we know it," said Erich Merkle, an industry analyst with IRN Inc. in Grand Rapids.
You can reach Brett Clanton at (313) 222-2612 or bclanton@detnews.com.
