August 23, 2010 / 9:14 PM / in 9 years

UPDATE 2-Chrysler to have difficulty turning '10 profit-CEO

* CEO Marchionne offers no guidance for 3rd or 4th qtr

* Marchionne: company progress “ahead of plan”

* Says has plenty of U.S. Chrysler dealers who want Fiat (Adds CEO comments, details on Fiat, Alfa Romeo dealerships, other background)

By Bernie Woodall

TOLEDO, Ohio, Aug 23 (Reuters) - Chrysler CEO Sergio Marchionne said on Monday it will be “difficult” for the automaker to turn a net profit for the full year 2010.

Marchionne did not offer guidance for Chrysler’s financial performance for either the third or fourth quarter of the year.

The No. 3 U.S. automaker, which emerged from a U.S. government-supported bankruptcy in June 2009 under the management control of Italy’s Fiat SpA FIA.MI, narrowed its net loss to $172 million in the second quarter, from a $197 million net loss in the first quarter. [ID:nN09251243]

On the company’s performance in general, Marchionne said he is “satisfied” and that the automaker is “well ahead of plan” for its turnaround after the bankruptcy.

“We’re ahead of plan,” Marchionne told reporters after Vice President Joe Biden addressed autoworkers at a Chrysler plant in Toledo that makes Jeep Wranglers. [ID:nN23177260]

“We are delivering on everything we said. We are doing it quietly, keeping our head down,” said Marchionne.

Earlier this month when Chrysler issued its second-quarter financial results, Marchionne said he would likely raise its outlook for 2010 after the third quarter.

General Motors Co [GM.UL] which also underwent a government-sponsored bankruptcy, has filed papers for an initial public offering of its stock, in a sale that could occur in about three months. [ID:nN18118235]

Marchionne did not make any remarks about a Chrysler IPO, but in the past has said he will wait to see how the GM IPO fares.

As he did in July, Marchionne said Chrysler would already be showing net profits if it had not borrowed from the U.S. Treasury in order to have operating cash.

“All the money given to us was debt,” said Marchionne. “The cost of carrying that cash is very large.

Marchionne said that Chrysler’s plans to ask existing Chrysler dealerships to add to their showrooms to show Fiat autos is well ahead of plan. The automaker has far more than the company target of 200 dealers to take on selling Fiats.

Chrysler has told its dealers that it would like to have the Fiat dealerships in 119 cities in 37 states and Puerto Rico.

The Fiat 500 subcompact will be introduced to the U.S. market in five months. Marchionne also said that the Alfa Romeo sports car will be sold at U.S. dealerships, on the Fiat side of joint Chrysler-Fiat dealerships.

“It is more than likely that the Fiat and Alfa Romeo brands will be co-marketed at the same location,” Marchionne said. (Reporting by Bernie Woodall, editing by Matthew Lewis)

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