It's been a good week for Chrysler Group. On Tuesday, Consumer Reports said all three of the car maker's brands are more reliable, including Jeep, the best of any domestic brand. Then on Wednesday, the United Auto Workers union said its members had ratified a new four-year contract with Chrysler, ensuring the company's fixed costs will remain fairly stable. As icing on the cake, Chrysler Thursday posted net income of $212 million for the third quarter, reversing a year-ago loss.
In fact, it's shaping up as a pretty good year for Chrysler, which just a little over two years ago barely escaped liquidation thanks to a taxpayer-financed bankruptcy restructuring. Chief Executive Sergio Marchionne today nudged up his year-end predictions for Chrysler, saying the company was likely to see adjusted net income of about $600 million (up from an earlier forecast of $200 million to $500 million) and generate $1.2 billion in free cash flow, up from $1 billion as previously expected. The net income figure excludes a $551 million loss to retire debt early.
"This house continues to be fully focused on financial performance and making outstanding cars and trucks by fully leveraging its alliance with Fiat," said Marchionne.
Chrysler sold about half a million vehicles worldwide in the three months ended Sept. 30, a 24 percent gain over the same period last year, and boosted its U.S. market share to 11.4 percent, from 9.6 percent a year ago.
Fiat S.p.A., the Italian car maker, is now fully in control of Chrysler. In July, it acquired the stakes held by the U.S. Treasury and the Canadian government since Chrysler's 2009 bankruptcy. A UAW trust for retiree health care still owns 41.5 percent of Chrysler on a fully diluted basis. As Marchionne continues to lead a turnaround, the trust will be looking for ways to monetize its investment. A public stock offering, once considered likely, is now on hold.