The deal maker has now swallowed Chrysler whole.
Chrysler Group reported a net loss of $690 million during Q1 because of $1.2 billion in charges associated with the UAW buyout, which allowed Fiat to take complete control of Chrysler. This is largely an accounting issue, but significant because – once again – Chrysler’s fate is entirely in the hands of a European corporation.
In the tally there were a -$504 million loss on retirement of debt from the prepayment of the UAW Retiree Medical Benefits Trust Note (aka the VEBA Trust Note) and a -$672 million charge for commitments from the January memorandum of understanding (MOU) signed with the UAW.
Excluding these charges, Net Income for Q1 was $486 million, up from $166 million a year ago. Net revenue was $19 billion for the quarter, up 23% from $15.4 billion in the prior-year period, mostly from an increase in vehicle shipments, including Ram pickup trucks and the all-new Jeep Cherokee, but helped with the Federal Reserve profligate monetary policy that allows for inexpensive auto loans.
Profits increased 35% to $586 million for the quarter, up from $435 million a year earlier. Better yet, Free Cash Flow during Q1$919 million, compared with $449 million a year ago; Cash as of 31 March 2014, was $12.4 billion.
Overall, it was a good to strong quarter for the comeback car company and soon to go public on the New York Stock Exchange. The newly merged Fiat Chrysler needs the money to embark on an ambitious five-year plan that will expand Jeep globally, and attempt to revive yet the Alfa Romeo and Fiat brands in the U.S.
