Chrysler Leaner, But Still Not Turning Profit

In the recent talk about the auto bailout, there has been one word the public hasn't heard much: Chrysler, which also received taxpayer help. In the new year, the automaker will launch 16 new or redesigned cars and trucks. But analysts say Chrysler is at least a year away from going public.

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MARY LOUISE KELLY, host:

We've heard a lot recently about the resurgence of General Motors. It has returned to profitability and it's selling its stock once again on Wall Street. But what about the other company that received a government bailout?

Chrysler is still struggling. Since the beginning of the year, it has lost nearly $500 million.

NPR's Sonari Glinton reports on the outlook of the smallest of the Detroit three.

SONARI GLINTON: This week, President Obama and Vice President Biden went to a Chrysler plant in Kokomo, Indiana, to bring attention to what they call a comeback. Here's Vice President Biden.

Vice President JOE BIDEN: To bring the automobile industry back, we knew we had to change things. We couldn't just keep doing the things the way we did. We knew the auto industry had to get leaner, had to get tougher, had to be more competitive.

Ms. SHAWN MORGAN (Spokesperson, Chrysler): We have a lot of ground to make up.

GLINTON: Shawn Morgan is a Chrysler spokesperson. She says the company has gotten leaner. It has fewer employees, fewer factories, fewer dealers and wages and benefits have been cut.

Ms. MORGAN: There's been a lot of challenging times, to put it mildly, in the industry and certainly for our company, in the most recent past. And we've learned from that, but we're going to continue learning.

GLINTON: Its going to need to do that and more. The company finds itself well behind GM and Ford. And many of its products still don't compare well against the best foreign models. It's a situation Chrysler has been in before.

Mr. LEE IACOCCA (Former CEO, Chrysler): Well, when you've been kicked in the head like we have, you learn pretty quick to put first things first. And in the car business, product comes first. And product is what brought us back to prosperity.

GLINTON: That was former Chrysler CEO Lee Iacocca in one of his many TV commercials from the 1980s. This is the second bailout for Chrysler. Then, as now, Chrysler's focus is on introducing new products.

Rebecca Lindland studies the car industry for IHS Automotive. Lindland says the new Chrysler and its corporate partner Fiat are taking a big risk in releasing 16 new or significantly redesigned cars.

Ms. REBECCA LINDLAND (IHS Automotive): There is a lot of expense that's going to be hitting their balance sheets while they launch these new products. But the goal is to make up that expense and to absorb that expense through increased profitability.

GLINTON: And Chrysler is going to be under great pressure to prove it can make money again. So far this year, it's had a net loss of $453 million. But Lindland says the bankruptcy and restructuring have given Chrysler a future.

Ms. LINDLAND: The outlook is significantly more positive because they've been able to restructure their dealer network. They've been able to right size the company themselves. They're hiring people from outside of the Big Three. And the people that are left are the ones that are really making a difference.

GLINTON: Lindland says when cars hit dealer showrooms, customers will notice. Tamara Darvish runs four Chrysler dealerships in Maryland and Florida. Darvish says she's already noticed a difference in Chrysler and wants me to test one out.

(Soundbite of engine revving)

Ms. TAMARA DARVISH (Owner, Chrysler Dealerships): Are you scared? No, no, you just press the button. There is no key.

GLINTON: Oh.

(Soundbite of beeping)

(Soundbite of engine starting)

Ms. DARVISH: Can you hear that? You feel your whole body sitting in that seat?

GLINTON: I can't lie, I do.

Ms. DARVISH: I mean, the Dodge Challenger is the car that you drive with your entire body and soul.

GLINTON: Darvish has been a Chrysler dealer for 30 years. She remembers the first bailout vividly.

Ms. DARVISH: I want to see Chrysler reemerge as the great car company it was. And I sort of just want to have the same feeling I had as being a part of that, like we did back in the '80s.

GLINTON: Darvish, like many analysts, believes that given time, the company will be profitable again. The question is how long that will take to happen.

Sonari Glinton, NPR News.

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