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  • 标题:Chrysler's losses exceed $1 billion
  • 作者:David McHugh Associated Press
  • 期刊名称:Deseret News (Salt Lake City)
  • 印刷版ISSN:0745-4724
  • 出版年度:2003
  • 卷号:Jul 25, 2003
  • 出版社:Deseret News Publishing Company

Chrysler's losses exceed $1 billion

David McHugh Associated Press

FRANKFURT, Germany -- More than $1 billion in losses at Chrysler squeezed profits at DaimlerChrysler AG down by 90 percent in the second quarter. Still, the CEO cited improved efficiency and quality in its U.S. operations.

The company, based in Stuttgart and Auburn Hills, Mich., said Thursday it earned euro109 million ($125 million) in the April-June period, down from euro1.11 billion the previous year. That still was better than the euro65 million ($74 million) profit predicted by analysts in a Dow Jones Newswires survey.

In another surprise, the company said its truck and bus division had returned to profitability.

In trading on U.S. and German financial markets, DaimlerChrysler shares rose Thursday.

But concerns remain for the automaker, particularly the shaky turnaround at Chrysler, a profit warning at Japanese partner Mitsubishi and the weak state of consumer demand in the United States and Europe.

Chief executive Juergen Schrempp said in a conference call that Chrysler was making "very substantial progress in productivity and quality," citing gains in manufacturing efficiency of 8.3 percent and better product ratings by the J.D. Power research firm.

DaimlerChrysler's overall sales fell 13 percent to euro34.3 billion ($39.5 billion) from euro39.3 billion in the year-ago period, a drop the company blamed partly on a weaker U.S. dollar.

The company's outlook remained decidedly mixed. While it saw signs of improvement in the United States, car sales in western Europe are expected "to remain at a low level for some time to come," Schrempp said. "We still see no sign of a sustainable upturn."

The company stuck with its forecast of an operating profit around euro5 billion ($5.7 billion) this year, but hedged Chrysler's target of a slim operating profit for the year by saying there were "substantial risks" due to the uncertain U.S. market.

Chrysler, as the company warned investors last month, was battered by the incentive wars with bigger rivals General Motors Corp. and Ford Motor Co.

The division, which had clawed its way back to profitability, lost euro948 million ($1.1 billion) in operating terms -- a reversal that casts doubt on a restructuring plan now in its third year. The division earned euro414 million in the second quarter a year ago.

Operating earnings exclude financial items such as interest and taxes, but often are used as a yardstick by investment analysts.

At the root of Chrysler's troubles was slack demand for cars in the United States, and competitors' attempts to lure buyers with costly incentives such as interest-free loans and rebates. Auto sales shrank 2.4 percent anyway.

Copyright C 2003 Deseret News Publishing Co.
Provided by ProQuest Information and Learning Company. All rights Reserved.

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