"Two Years After Rescue, Chrysler Posts First Profit Since 1997"
President Obama’s plan to rescue Chrysler as part of a broader bailout of the American auto industry in 2008 came under fire from various Republicans who predicted the company would never return to profitability. “The government has forced taxpayers to buy these failing companies without any plausible plan for profitability,” South Carolina Sen. Jim DeMint (R) said. Arizona Sen. John McCain (R), meanwhile, said that if “anybody believes Chrysler is going to survive, I’d like to meet them.”
Two years later, though, Chrysler has done just that, posting its first operating profit since the rescue and its first net profit since 1997. Chrysler’s $225 million income, including $183 million in net profits, would have been more than $500 million larger, the company said, had it not decided to retire the debt it owed the U.S. and Canadian governments. CEO Sergio Marchionne said the company’s forecast for 2012 is even better, the New York Times reports:
Mr. Marchionne, who also heads Chrysler’s Italian parent company, Fiat, said the Detroit automaker expected to earn profit of $1.5 billion this year as it continued to introduce products including the Dodge Dart, a new compact car derived from an existing Fiat model.
“The house is in good order,” Mr. Marchionne said in a statement. “Now we greet a new year of high expectations with our heads down, forging ahead and focusing on executing the goals we’ve set for ourselves as a company.”
Chrysler has added 9,400 jobs since the rescue and plans to announce tomorrow that it will add 1,600 more at a plant in Illinois, where it will manufacture the fuel-efficient Dodge Dart. That’s part of an industry-wide hiring spree in the United States, as American and foreign automakers are expected to add nearly 167,000 jobs by 2015. Boosted by strong sales years in both 2010 and 2011, American automakers now control more than half of the United States’ market share.
Of course, the profits and jobs that have come from the renewed success of the American auto industry would not have been possible had Obama followed the advice of Republicans, whose plan to let the companies enter an uncontrolled bankruptcy would have killed as many as 80,000 jobs.