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Chrysler's Hourly Employees To Get Bonuses Friday - The Detroit News

Chrysler Group LLC's 26,000 U.S. hourly employees will get their profit-sharing bonus checks Friday, according to an email CEO Sergio Marchionne sent late Monday to local union leaders, a copy of which was obtained by The Detroit News.

In his message, Marchionne praised workers for helping restore the Auburn Hills automaker to profitability and said they would receive a base bonus of $1,500 before taxes and union dues. Workers who worked overtime will receive more; workers who did not put in a full year of full-time work will receive less.

"In 2011, we demonstrated that outstanding results can be achieved when we bring together clear objectives, strong motivation, and enormous passion," Marchionne said in the email, a copy of which was obtained by The Detroit News. "Therefore, it is my pleasure to recognize you with this payment, which reflects the collective achievement of our company's performance and your personal contributions in 2011."

Chrysler reported its first net profit of $183 million — its first in 15 years — last week. For the first time since 2005, it also posted an operating profit of almost $2 billion. The company's annual earnings were actually much higher, but Marchionne decided to pay back Chrysler's loans from the U.S. and Canadian governments early.

"It took an incredible team effort to bring about such remarkable results, and you should be proud," he said in his message to the United Auto Workers Monday. "Significant progress can be accomplished when we work together and our goals are aligned."

Detroit automakers have typically paid out bonuses in March.

Chrysler workers were happy to hear that their checks are in the mail.

"It's a nice gesture. I really think highly of Marchionne," said John Klik, who works at Chrysler's Warren Stamping Plant. "I'm just thankful I have a job. This is a little extra sugar. But I wouldn't mind if they would apply it to giving back benefits to the retirees."

Ford said Tuesday that its hourly workers will receive their profit-sharing checks on March 14.

The base bonus at Ford, which earned more than $20 billion last year, will be $6,200. Ford salaried employees will receive their checks a day later.

General Motors Co. is not due to release its earnings until next week.

Marchionne did not say why Chrysler bonuses were going out earlier, but he did ask UAW members to continue their work to restore the automaker to sustained profitability.

"I ask that you continue to demonstrate the strength and courage you have shown to challenge our destiny and revitalize this great company," Marchionne said. "The future holds enormous opportunity, and it's a challenge that calls for our continued, shared commitment. As you go about your jobs in 2012, bring your determination and passion to the task at hand and have faith in your leadership and each other to create a great future."

BY BRYCE G. HOFFMAN THE DETROIT NEWS
bhoffman@detnews.com


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Chrysler Super Bowl Ad Features Clint Eastwood - The Detroit News

Las Vegas— Chrysler Group LLC will unveil a two-minute ad during Sunday's Super Bowl that features Clint Eastwood talking about the challenges the U.S. faces, dealers said today.

Chrysler CEO Sergio Marchionne showed the ad to hundreds of the company's dealers here at the National Automobile Dealers Convention and made a passionate speech, several dealers said.

The ad says the U.S. will continue to face economic challenges. "It's halftime of the game and halftime in America," Eastwood says, according to said Rick Berry, owner of Tate's Auto Center in Arizona. "It isn't so much about products and Chrysler, but it's really about the turning point for America."

The ad features Detroit autoworkers — including workers welding new vehicles — and the panoramic skyline of Detroit. It features firefighters and a family struggling to make ends meet.

"I had tears streaming down my cheeks," said Terry Megee, president of Megee Motors in Delaware. "It's a powerful message."

David Kelleher, a Pennsylvania Chrysler dealer and chairman of Chrysler's national dealer council, said the ad will resonate.

"The ad says, 'Look America, if you're feeling down right now, look where we were - look where Detroit was and look where Chrysler was. Even you told us to go away at one point," Kelleher said. "We fought back and we dusted off and we got help and now we're here."

He said the message to Americans who are hurting or looking for work is simple. "If you're trying to find where you need to go, just use us as an example. Nobody was more dead than we were."

Chrysler nearly collapsed in late 2008 and was rescued as part of a $12.5 billion bailout. After a bankruptcy restructuring, Chrysler is now 58.5 percent owned by Italian automaker Fiat SpA.

Ralph Gillies, president and CEO of the SRT brand and senior vice president of design at Chrysler, said the ad is powerful.

"I want to see what America says. It's a pep talk we kind of need to hear in America," Gillies said. "As a country, we need to galvanize. The only way to help (gross domestic economy) is to start really thinking about what you consume. At the end of the day, that's how economies recover."

The ad credits the U.S. government for saving Chrysler when many thought the company was doomed, Megee said. Tight shots of some car parts are seen along with a Jeep Grand Cherokee.

The ad notes that the United States has faced tough times for the last three years and people are still worried about the direction of the country. Eastwood's message is don't give up, dealers said.

"Detroit was down and out - and it focuses on Detroit as an example of turning things around," Berry said. "Chrysler was counted out and Sergio and his team came in and turned the company around."

Eastwood appears in shadow for most of the ad and then appears on camera at the end.

Marchionne told the dealers the company plans to refresh its Dodge Ram pickup - and will unveil more details at the New York Auto Show. He said he spent the night in Las Vegas just to talk to them.

"It was a reflective speech thanking the dealers for helping us getting through these tough times," Marchionne said. "The future is not letting up. That's the culture inside the company. Don't sit there and pat yourself on the back - get back to work."

BY DAVID SHEPARDSON DETROIT NEWS WASHINGTON BUREAU
dshepardson@detnews.com




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Chrysler Profit Means $1,500 Bonus For Employees - The Detroit News

Chrysler Group LLC not only posted its first annual net profit since 1997 Wednesday, it earned enough money to keep its Italian parent from succumbing to the worst economic crisis to hit Europe since the Great Depression.

CEO Sergio Marchionne said all of Fiat SpA's net income this year came from Chrysler, and he warned the company's European employees that they need to do something to even out that equation.

"I certainly have no intention of supporting that nonsensical arrangement. That's the definition of what I call an unhappy marriage," Marchionne said during a conference call with analysts and reporters Wednesday. "So somebody better get off their butts and just step up to the grid, because we're not pulling the cart here."

Chrysler reported a net profit of $183 million for 2011. With Chrysler's contribution, Fiat SpA reported a trading profit of 2.39 billion euros ($3.2 billion) for the year — more than double the 1.12 billion euros ($1.4 billion) it earned in 2010. Without Chrysler, Fiat would only have made a trading profit of just over 1 billion euros ($1.37 billion), nearly 6 percent less than it did a year before.

Fiat is reeling from a deepening financial crisis in its home market. Italian automobile sales were down almost 17 percent in January, and most other European markets are also seeing significant declines as consumers hold off on big ticket purchases while their leaders grapple with a mounting debt crisis.

But Marchionne said that is only part of the problem. Fiat's European factories are also unproductive and inefficient.

"One of the things that we need to learn how to do is to effectively use these assets in a way that reflects the same level of dexterity and flexibility that we're currently getting out of the American production system," he said. "We cannot continue to subsidize a suboptimal, inefficient manufacturing asset based on the basis of ideology."

And he said Fiat cannot do that alone; it also needs workers to accept new, more competitive operating agreements like those the United Auto Workers negotiated with the company last fall.

As part of that agreement, UAW members will be getting profit-sharing bonuses of more than $1,500. Marchionne said Chrysler's salaried workers will also be getting bonus checks, but he would not say when or how much they will receive.

"This is a reward that you have earned," he said in an email to employees Wednesday, a copy of which was obtained by The Detroit News. "The more difficult the task, the more satisfying it is to overcome all obstacles. You have been to hell and back, and you defied predictions of our demise. Your efforts rewrote the history that so many naysayers had forecast."

Chrysler was bankrupt when Fiat agreed to take it over in 2009. Last year, the company not only paid back its debt to the U.S. and Canadian governments, but also earned an operating profit of almost $2 billion — its first since 2005, when the company earned an operating profit of $1.8 billion. It had not reported a net profit since 1997.

Chrysler's financial results were not reported separately after it merged with Germany's Daimler AG in 1998, and they were not reported at all following its sale to private equity firm Cerberus Capital Management LP in 2007.

"Chrysler is the surprising comeback kid — again," said analyst Michelle Krebs of Edmunds. "When Chrysler emerged from bankruptcy, there were plenty of skeptics, but the automaker has proven them wrong. Since detailing its plan for the future in November 2009, Chrysler has done everything it said it would, creating an impressive recent track record and providing confidence that it will meet its 2012 goals."

Marchionne said the company is approaching this year "with some degree of optimism," despite the growing malaise in Europe. The U.S. market is rebounding, and Chrysler vehicles, such as its all-new Dodge Dart, are positioned to grab an even bigger share of it in 2012.

He confirmed that Chrysler will add a third shift — more than a thousand workers — at its plant in Belvidere, Ill., to support production of the Dart and other vehicles based on the same platform. Those new hires will come in as lower-wage entry-level employees as provided for by the company's two-tier employment agreement with the UAW.

Wednesday's results also bring Chrysler's approximately 26,000 UAW members one step closer to receiving the other half of the bonuses they were promised for signing that contract. Workers already received $1,750 upon ratification; they will receive another $1,750 as soon as Chrysler posts four consecutive quarterly profits.

The company earned $225 million in the last three months of 2011, its highest quarterly profit since emerging from bankruptcy.

Chrysler was also profitable in the third quarter of last year. It posted a loss in the second quarter, but only because the company decided to pay back its loans to the U.S. and Canadian governments ahead of schedule.

BY BRYCE G. HOFFMAN - THE DETROIT NEWS
bhoffman@detnews.com



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Chrysler Ends Robust '11 With $183M Profit - Detroit News

Chrysler Group LLC reported Wednesday a net profit of $183 million for 2011, swinging back into the black from a loss of $652 million in 2010.

It was the first time the Auburn Hills automaker has reported a full-year profit since 1997, and it exceeded the targets set by CEO Sergio Marchionne when Fiat SpA took over the company in 2009.

"The house is in good order. We are proud of the work we've done," Marchionne said in a statement released Wednesday morning. "Now we greet a new year of high expectations with our heads down, forging ahead and focused on executing the goals we've set for ourselves as a company."

Chrysler also reported net income of $225 million for the last three months of 2011, the company's highest quarterly profit since emerging from bankruptcy.

For the full year, Chrysler reported net revenue of $55 billion, a 31 percent increase over the previous year's total. Revenue increased 41 percent in the fourth quarter, climbing to $15.1 billion.

Chrysler's free cash flow for the year totaled $1.9 billion, and the company ended 2011 with $9.6 billion in cash, up from $7.3 billion a year ago. The automaker also cut its net industrial debt in half last year, down to $2.9 billion from $5.8 billion at the end of 2010.

Today's results capped off a strong year for Chrysler, which saw worldwide vehicle sales increase by 22 percent to nearly 1.9 million units. The company's share of the critical U.S. market climbed from 9.2 percent in 2010 to 10.5 percent in 2011, thanks to a 43 percent increase in domestic sales.

“Chrysler is the surprising comeback kid -- again," said analyst Michelle Krebs of Edmunds. "When Chrysler emerged from bankruptcy, there were plenty of skeptics, but the automaker has proven them wrong. Since detailing its plan for the future in November 2009, Chrysler has done everything it said it would, creating an impressive recent track record and providing confidence that it will meet its 2012 goals.”

Chrysler's success allowed Fiat to pay off its loans from the U.S. and Canadian governments ahead of schedule, and increase its controlling stake in the automaker to 58.5 percent.

The rest of Chrysler is owned by an hourly retiree health care trust fund run by the United Auto Workers.

The company's earnings bring UAW members one step closer to getting the other half of the signing bonus their union negotiated with Chrysler for the new contract in October. That bonus is contingent on Chrysler's return to solid financial footing.

Chrysler's financial results were not reported separately after it merged with Germany's Daimler AG in 1998, and they were not reported at all following its sale to private equity firm Cerberus Capital Management LP in 2007.

BY BRYCE G. HOFFMAN - THE DETROIT NEWS
bhoffman@detnews.com



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