Sergio Marchionne
With Chrysler’s new partner Fiat making the hard and fast decisions, the automaker is now on track to return to profitability. Even with the still-floundering U.S. economy and fluctuating exchange rates, new CEO Sergio Marchionne is confident Chrysler will be profitable within the next two years.
On November 4 Marchionne will divulge Chrysler’s five-year business plan, which he has revealed will include plans to make public the company’s quarterly financial statements next year and launch an initial public offering for stock as early as 2011.
The financial sector seems to agree with Marchionne. Analyst Adam Jonas of Morgan Stanley said Chrysler could report an operating profit of $841 million in 2010, but end the year with a net loss of $169 million. For 2011 Jonas is predicting an operating profit of $2.48 billion and net income of $952 million--numbers Chrysler could only dream of not too long ago.
Under the control of former parent Cerberus Capital Management Chrysler was listed as a private company so had no obligation to release financial results. However, reports claimed that Chrysler’s losses could have topped as much as $6.8 billion as recently as 2007. Thanks to bankruptcy, however, Chrysler (and General Motors for that matter) has shed much of its liabilities and is currently sitting on a good balance sheet.
