A top Chrysler LLC executive says the automaker should be viable by springtime because of its restructuring, introduction of new and improved vehicles, and higher sales due to loosened credit and sweetened incentives for buyers.
Vice chairman and president Jim Press defined “viable” as remaining solvent and continuing to invest in new products, with an ability in the future to repay government loans.
But he told reporters on Saturday at the National Automobile Dealers Association annual convention that he doesn’t know when the privately owned Auburn Hills, Michigan-based company will return to profitability.
Press said Chrysler can be viable if the US light vehicle market shrinks from last year’s 13.2 million in sales to just over 10 million. As recently as 2007, the market exceeded 16 million.
The struggling Chrysler has received US$4 billion in government loans so far to hold off bankruptcy, and it expects to get US$3 billion more after it files a viability plan with the government by Feb. 17. Without the loan money, its executives have said it would run out of cash.
Press told reporters that the country was living off loose credit and fast spending for years, and a correction probably is good. But that means automakers have to be prepared to make it on sales that are far lower than in previous years.
“Good business people will see this as normal and calibrate ourselves and our organizations as if today was the way life is going to be,” Press said. “We shouldn’t bank on some of these easy monies.”
He said Chrysler’s retail market share through Thursday was 10.1 percent, the highest it’s been in recent months. Sales, he said, have been better than last month, and a normal seasonal uptick in March, April and May should help Chrysler become viable, he said.
Chrysler’s sales were down 30 percent last year compared with 2007, and they were off 53 percent last month. The poor showing led several industry analysts to predict the company could not make it through this year without a merger, alliance or some other combination.
Last week Chrysler announced a nonbinding preliminary deal for Fiat Group SpA to take a 35 percent stake in Chrysler in exchange for small-car and small-engine technology that will help Chrysler bring smaller, more fuel-efficient models to market faster.
But it could take two years for the Fiat products to arrive in the US, which is Chrysler’s primary market. Fiat is not putting any cash into the deal.
Chrysler employs about 66,000 people worldwide, with the bulk of them in the US.
Chrysler on Thursday announced employee pricing, plus an incentive, plus low-interest loans to help move its vehicles.
Chrysler shut down all 30 of its factories for much of last month and this month, but all plants will be back on line as of today, Press said.
Japanese technology giant Softbank Group Corp said Tuesday it has sold its stake in Nvidia Corp, raising US$5.8 billion to pour into other investments. It also reported its profit nearly tripled in the first half of this fiscal year from a year earlier. Tokyo-based Softbank said it sold the stake in Silicon Vally-based Nvidia last month, a move that reflects its shift in focus to OpenAI, owner of the artificial intelligence (AI) chatbot ChatGPT. Softbank reported its profit in the April-to-September period soared to about 2.5 trillion yen (about US$13 billion). Its sales for the six month period rose 7.7 percent year-on-year
CRESTING WAVE: Companies are still buying in, but the shivers in the market could be the first signs that the AI wave has peaked and the collapse is upon the world Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported a new monthly record of NT$367.47 billion (US$11.85 billion) in consolidated sales for last month thanks to global demand for artificial intelligence (AI) applications. Last month’s figure represented 16.9 percent annual growth, the slowest pace since February last year. On a monthly basis, sales rose 11 percent. Cumulative sales in the first 10 months of the year grew 33.8 percent year-on-year to NT$3.13 trillion, a record for the same period in the company’s history. However, the slowing growth in monthly sales last month highlights uncertainty over the sustainability of the AI boom even as
AI BOOST: Next year, the cloud and networking product business is expected to remain a key revenue pillar for the company, Hon Hai chairman Young Liu said Manufacturing giant Hon Hai Precision Industry Co (鴻海精密) yesterday posted its best third-quarter profit in the company’s history, backed by strong demand for artificial intelligence (AI) servers. Net profit expanded 17 percent annually to NT$57.67 billion (US$1.86 billion) from NT$44.36 billion, the company said. On a quarterly basis, net profit soared 30 percent from NT$44.36 billion, it said. Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said earnings per share expanded to NT$4.15 from NT$3.55 a year earlier and NT$3.19 in the second quarter. Gross margin improved to 6.35 percent,
BUST FEARS: While a KMT legislator asked if an AI bubble could affect Taiwan, the DGBAS minister said the sector appears on track to continue growing The local property market has cooled down moderately following a series of credit control measures designed to contain speculation, the central bank said yesterday, while remaining tight-lipped about potential rule relaxations. Lawmakers in a meeting of the legislature’s Finance Committee voiced concerns to central bank officials that the credit control measures have adversely affected the government’s tax income and small and medium-sized property developers, with limited positive effects. Housing prices have been climbing since 2016, even when the central bank imposed its first set of control measures in 2020, Chinese Nationalist Party (KMT) Legislator Lo Ting-wei (羅廷瑋) said. “Since the second half of
RSS