Daimler forces Chrysler to give up goods on $515M Q2 loss
Normally the privately owned Chrysler LLC is under no obligation to reveal its financial performance to Wall Street, but yesterday the Cerberus-owned automaker was forced to show a few pages from its accounting books thanks to one of its largest stakeholders and former owner, Daimler AG. The German automaker revealed that in the last six months, its 19.9% stake in Chrysler has cost it $585 million. To clarify Daimler's numbers, Chrysler also revealed yesterday that the loss being attributed to it, all of which was incurred in Daimler's first fiscal quarter of the year, is around 65 million euro, or $103 million, using American accounting standards. Perhaps realizing that all analysts had to do was multiply Daimler's loss by five to arrive at Chrysler's total loss for the last quarter, the automaker just came right out and said it lost about $515 million. While a mere pittance to the $8.7 billion worth of red ink Ford spilled during Q2, it was enough to drag down Daimler's numbers halfway around the world.
[Source: The Detroit News, Photo: Fire Monkey Fish | Licensed under Creative Commons 2.0]
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Reader Comments (Page 1 of 2)
mike 11:04AM (7/25/2008)
Ok here's my question, has anyone in here seen interior of a Chrysler or a Dodge? If your answer is YES, are you surpriced that they are losing money??????????????????????????????????
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MKULTRABLIZZARD 12:33PM (7/25/2008)
Surprised, yes. Surpriced, wat?
Vintage 1:34PM (7/25/2008)
I think they might be failing because they employee people with your education/intelligence. Zing.
Purifoy 11:12AM (7/25/2008)
GM is doomed.
Ford is doomed.
Chrysler is doomed.
Or are they?
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mike 11:18AM (7/25/2008)
I do not believe in the whole DOOOm GLOOM thing. Even if they will be close to dieing someone will step in, Feds or states.
What i do believe is that all 3 will shrink by a lot, Honda will replace Chrysler, GM will be #2, and Huindai will be competing for top 5.
300Kid 11:51AM (7/25/2008)
Hyundai is already number 5 according to this:
http://www.autoblog.com/2008/07/04/hyundai-kia-pass-honda-to-become-worlds-5th-largest-automaker/
R 1:05PM (7/25/2008)
Doesn't Hyundai have massive government backing from their home country?
stk718 11:17AM (7/25/2008)
Chrysler is doomed for sure. Seems that way at least.
Ford and GM, have hybrids at least, and they are finally gonna/bringing better looking euro models over here.
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MajorGeek 11:17AM (7/25/2008)
Doomed, no. These guys have lost money for years and frankly if you look at other car companies and the past, 515 actually is not horrible. 585 million versus 8.7 billion is a pittance in the grand scheme of things.
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mike 11:22AM (7/25/2008)
So what? Ask anyone in here and they'll tell you that Detroit has some good cars, like Aura and Astra and Fusion. Yet they do not sell well, and even if they do not at the price car maker makes lots of money on. Hybrids or not people want good cars, nice interior, good quality........detroit has screwed the public so many times they are not willing to risk it again.
As for euro cars, Pontiac had a Australian build muscle car in here few years ago.......was a big failure. Ford had that Mercur thing.
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jamie 11:56AM (7/25/2008)
Aura and Astra are phenomenal cars. The problem is that GM has only 400 dealers across the country to sell them. So how can Saturn compete with Chevrolet, Ford, Chrysler, Toyota, Honda and Nissan that have thousands of dealers? Saturn is pretty much crowded out of the marketplace.
However since GM is finally planning to merge Saturn with BPG, the prospects are looking that much brighter. The next big hurdle to overcome is manufacturing Astra in America to avoid the Euro vs dollar debacle.
As for Fusion...Ford missed the mark with that moniker. If Ford had called it the new Taurus, it would have sold like hotcakes. Renaming the Five Hundred as Taurus killed a lot of potential sales. Taurus was essentially a midsize FWD sedan, and was not supposed to be a full size FWD sedan. Lesson learned, I hope.
Tourian 12:12PM (7/25/2008)
@jaime
What are your sources for saying GM is going to merge Saturn with BPG?
mike 12:01PM (7/25/2008)
@ Jamie-----If GM really thought that it could dome something in that segment they could have simply lost Aura and Astras as Chevys, as simple as that. GM knows that public doesn't want to buy its cars because.....because they did so in the past
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chuckles 12:21PM (7/25/2008)
I think its a stretch to say that Ford or GM are doomed. Chrysler is most likely not doomed as I can see them being bought out and merging if things do not improve. As far as GM and Ford i think the 2010/11 model year will be a good indicator of their futures. Ford seems to have the clearest plan (finally) in my opinion with their decision to bring over its euro lineup. Brand identity is much different across the pond due to higher quality standards. With the plant retooling here, they will be much more adaptive in our unstable economy. Also their 8.7 billion loss is not that crazy considering their heavily reinvesting in their own company. It was more of a 2 billion cash loss leaving them at around 26 billion in cash... hardly enough to throw the "doomed" term around.
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inteller 12:24PM (7/25/2008)
If Chrysler only lost $500 million then they are doing GREAT compared to GM and Ford.
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John 12:55PM (7/25/2008)
$8B of Ford's $8.7B is a writedown on assets. It is totally ridiculous of AB and others to throw around the $8.7B number as if that is what Ford lost in sales profit or implying that it is an apple to apple comparison with Chrysler's number.
Come on AB, do some homework and provide accurate comparisons.
The Other Bob 12:42PM (7/25/2008)
All Daimler has to do is look in the mirror to figure out why they got hit with a $500+ million loss.
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MemphisNET 1:08PM (7/25/2008)
As is in most divorces, one party (Daimler) is being a crying baby and needs to point fingers. There will be an upswing from the Daimler years for Chrysler, but its gonna take time.
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Brad 1:10PM (7/25/2008)
The $585 million loss is only for Daimler's 19.9% share of Chrysler LLC. Somebody better at math than me can probably apporximate the rest of the total loss by Chrysler LLC.
I still don't think Chrysler is doomed. It's going to take them a little bit to overhaul the lineup. They are still dealing with designs that Daimler already had in the pipeline.
Even at the worst I thnk Nissan is ready to step in and purchase Chrysler. Those two are awful chummy here of late.
Now it's just my opinion but I don't think the interiors are all that bad. But then again a vehicle's interior is WAY down the list of my hot button items when considering a car. How the seat fits me, how comfortable it is, are the radio controls easy to operate. Those are the things that are important to me. I could care less how the material looks on the seat or what material covers the instrument panel.
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Omar 2:58PM (7/25/2008)
The hell with the interior, look at the exterior!!! Given the same materials, they could at least form them into a more pleasing shape without spending any more money than they currently do putting out crap. That said, the same goes for the interior...awful. We have the talent and skills in this country to make better cars, but unfortunately, it's all in the hands of idiotic management!
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