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.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn.
He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe.
Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap.
AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks.
Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
