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Chrysler turns first profit since 2006

DETROIT — For the first time in nearly seven years, Detroit's car companies are all making money.

Chrysler, the last of the three to return to profitability, said Monday it made a $116 million net profit in the first quarter on revenue of $13.1 billion. The company, which emerged from bankruptcy protection a little less than two years ago, hadn't reported a profit since 2006.

General Motors, which also went into bankruptcy in 2009 and took billions in government aid, has four profitable quarters under its belt and held an initial public offering in November to help repay its loans. Ford, which didn't take bailout money, reported its eighth consecutive quarterly profit last week. Ford's 2010 profit of $6.6 billion was the highest in a decade.

"It's kind of miraculous," said Van Conway, a consultant and founder of turnaround firm Conway MacKenzie. "If all of us were to put ourselves back in 2009, could we imagine that GM could have done an IPO and these companies would be enjoying this level of profit? I don't think so."

It's the payoff for cutting staff, plants, car brands and wages during the recession and bankruptcy. At the same time, car sales are rising as the economy improves. Detroit is also taking away customers from Toyota, which was hurt by recalls last year and the recent Japanese earthquake.

The results are a triumph for Chrysler CEO Sergio Marchionne, who turned around Italian automaker Fiat SpA six years ago.

"The first quarter is done, but we've got a lot of quarters to do," he said.

Marchionne said Chrysler remains on track to deliver a full-year net profit between $200 million and $500 million. That would help Chrysler reach its goal of having a public offering later this year or early next.

Chrysler's sales rose 18 percent worldwide in the first three months of 2011, with new models helping the bottom line.

The U.S. government remains a part owner of Chrysler, holding an 8.6 percent stake.

Chrysler turns first profit since 2006 05/02/11 [Last modified: Monday, May 2, 2011 8:04pm]
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