As Chrysler reported its third-quarter earnings were up 22%, analysts asked CEO Sergio Marchionne about the postponed launch of the 2014 Jeep Cherokee and the pace of Fiat’s European recovery.
Chrysler’s $464-million net income once again enough to write off Fiat’s 247-million euro ($339 million) loss for the July-September period. Because Fiat owns 58.5% of Chrysler, it actually reported an overall profit of 190 million euros ($261 million), 23% lower than a year earlier.
Chrysler took a $343 million charge during the third quarter because of the late launch of the new Cherokee. Also, part of the cash payment could also be linked to the $600-million that headed towards the UAW Retiree Medical Benefits Trust.
“The only number I am not happy with is that we were not able to produce more cash,” Marchionne said. “We had over 30,000 (Cherokee) units in yard hold at the end of September … and should have adequate inventory in the (U.S.) dealer network by mid-November.”
It was Chrysler’s ninth consecutive profitable quarter as it saw increased demand for pickups and SUVs. Total revenue grew 13.5% to $17.6 billion from $15.5 billion a year earlier. Chrysler CFO Richard Palmer said the Cherokees late in the third quarter will be available in showrooms before the end of December.
“We have had production issues in terms of the launch of the Cherokee, and those difficulties are reflected in the quarterly earnings,” Marchionne said. “Notwithstanding that, I am quite happy with what we got done.”
Chrysler stopped producing the Liberty model in August 2012 to retool its Toledo assembly facility to build the Cherokee.