DETROIT - Chrysler Group will pay its hourly and salaried employees a performance bonus for their contributions in helping the company introduce 16 new or revamped vehicles in 2010, CEO Sergio Marchionne said today.
Chrysler's 22,000 U.S. and 7,600 Canadian hourly employees will receive $750 apiece, probably on Feb. 11, according to Mike Palese, a Chrysler spokesman. Chrysler's salaried employees -- 10,000 in the U.S. and 750 in Canada -- will also receive a bonus, but Palese declined to specify the amount.
Employees received an email from Marchionne this morning notifying them of the payment.
“It is a performance payment in recognition of what I consider to be extraordinary performance by the industrial side of the business. The way this house has responded to the introduction of 16 cars has been extraordinary," Marchionne said in a conference call with analysts this morning.
"We were able to get it done. It would have been inexcusable not to recognize what people have done.”
Marchionne said the payments will be made even though Chrysler posted a net loss in 2010 of $652 million and a modified operating profit of $763 million for the year.
The obligation to reward employees was more important than improving “bottom line profitability,” Marchionne said. “The fact that we're now indicating we will be bottom line profitable suggests we did this with some degree of confidence."
Profits on horizon
Just a year and a half after emerging from its government-sponsored bankruptcy, Chrysler posted an operating profit of $198 million for the fourth quarter.
The automaker -- helped by new and redesigned models, as well as higher industry sales forecasts for the U.S. market -- also said it expects to generate net profits of $200 million to $500 million this year on revenues of $55 billion. That compares to the net loss of $652 million last year, tied to interest payments on its U.S. rescue loans, on revenues of $41.9 billion.
Chrysler posted a net loss for the fourth quarter of $199 million -- the biggest of the year.
The automaker -- controlled and managed by Italy's Fiat SpA since it exited bankruptcy protection -- said its fourth-quarter results were helped by better product mix and pricing, productivity gains and improved quality. But in comparison to the third-quarter, the performance was negatively impacted by lower volumes, increased advertising and higher launch costs, the company said in statement today.
Beginning with the fourth-quarter results, Chrysler labeled its operating profit a 'modified ' figure that excludes such items as taxes, interest and pension-related costs.
While Ford Motor Co. and General Motors Corp. are now profitable, Chrysler has not turned a quarterly profit since leaving bankruptcy. During the fourth quarter of 2009, the company lost $2.7 billion.