Chrysler on track to break-even in 2010
NEW YORK |
NEW YORK (Reuters) - Chrysler Group LLC is on track to break even on an operating basis in 2010 and is ahead of its turnaround targets, Chief Executive Sergio Marchionne said on Tuesday.
Chrysler, which emerged from a U.S. government-supported bankruptcy in June under the management of Italy's Fiat SpA (FIA.MI), has been battling to stabilize sales in the United States while working to improve its vehicles.
Marchionne -- speaking a year after the U.S. autos task force rejected turnaround plans for Chrysler and U.S. rival General Motors Co GM.UL and warned bankruptcy was an option -- said Chrysler holds more than $5 billion in cash.
He also said Chrysler's break-even point was substantially lower than most analysts estimated.
"To the extent that I'm producing cash and I keep on investing in the brand portfolio ... I feel a lot more comfortable today than I did 12 months ago -- by far," Marchionne said at the National Automobile Dealers Association/IHS Global Insight Automotive Forum in New York.
Chrysler's U.S. sales fell about 36 percent in 2009 from the previous year, a much deeper decline than the 21 percent drop for the industry overall.
The automaker's U.S. sales were down about 3 percent through the first two months of 2010 from the first two months of 2009 and down about 10 percent in March from a year earlier when it pushed heavy cash rebates a month before the bankruptcy.
Marchionne said Chrysler would not resort to big incentives to drive sales, calling the strategy "unwise."
"We've been sticking to our guns and its worked well so far," Marchionne told reporters after his remarks.
Chrysler unveiled a five-year turnaround plan in November that includes introducing the Fiat 500 subcompact to the U.S. market. Much of the plan is expected to be executed over the first two years.
(Reporting by Soyoung Kim and Deepa Seetharaman; editing by Gerald E. McCormick and Andre Grenon)
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