Marchionne expects Chrysler to show an operating profit of $3 billion this year

Article by Christian Andrei, on July 6, 2012

Chrysler said that its operating profit in 2012 may surpass its $3 billion goal, according to Fiat-Chrysler CEO Sergio Marchionne. At a press conference, Marchionne said that Chrysler sold 1.23 million cars in the first half, which is more than half of its target. He said that Chrysler is near to its goal of $3 billion; however, Chrysler may “overshoot it.”

He said that if Chrysler chooses to produce over 2.8 million cars in the U.S., it will have to increase its production capacity. But he didn’t say where it will get the boost from. Fiat’s intention is to use the additional capacity in its five Italian factories to produce cars to export to the U.S. 

He said that if Fiat can’t ensure the required labor flexibility in its Italian plants to cope with export demand, it will think about shutting down an Italian plant.

Fiat moved to raise its hold on Chrysler earlier, saying that it exercised an option to purchase about 3.3% more of U Chrysler from the VEBA trust fund, increasing its stake to 61.8%.

When asked about the timing of purchasing what’s left of Chrysler to get total ownership, Marchionne said that he doesn’t have a reason to continue steadily buying up the stake up to 2016, as VEBA stipulated. He said that waiting until 2016 could already be too long and that acquiring the remaining stake may be bought with cash.

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