DETROIT - Reporting a first quarter operating profit of $111 million, the Chrysler group said it has stemmed six consecutive quarters of red ink and could end in the black this year, instead of simply meeting its breakeven goal.
CEO Dieter Zetsche opened an earnings results press conference jesting that "only every 10 years Chrysler returns to profitability. I can tell you this is the last time."
The Chrysler group took a restructuring charge of $274 million for the quarter for writing down the cost of closing engine plants in the United States and Mexico and for selling its Eurostar plant in Austria. The automaker lost $1.2 billion before charges during the same quarter a year earlier.
Zetsche said Chrysler earnings were up because of improving U.S. auto sales as well as its massive cost-cutting program that began last year.
He said the company could do better than expected this year but would not give projections, saying there still is uncertainty in the fiercely competitive market.
Revenues for the quarter increased 11 percent to $13.9 billion compared with the first quarter of 2001. Market share during the first three months stood at 13.7 percent, down 0.7 percent points from the same period in 2001. Sales for the quarter totaled 542,199, down 9.1 percent from 596,811 in the year-ago period.
Zetsche said the Chrysler group's program to cut material costs is still finding significant savings despite that "the low-hanging fruits are harvested."
The group wants to cut 3,000 jobs this year, positions that are likely to be dropped through attrition and early retirements rather than layoffs, as part of its goal of slashing of 26,000 jobs through 2003, said Wolfgang Bernhard, COO. Last year, the company cut 20,500 jobs, including 1,000 contract workers.