A court decision on the price ofshares could come by tomorrow. Meanwhile, the launch of the Jeep Cherokee is being pushed back one month due to quality issues.
’14 Cherokee launch delayed until September.
Awaiting a judge’s ruling on the price of a remaining stake incontrolled by retirees, Chrysler- CEO Sergio Marchionne looks toward taking the American auto maker public “by November or December.
“Obviously, at the end of the year we’ll be ready to move on an (initial public offering),” Marchionne comments during a pair of conference calls addressing both auto makers’ second-quarter earnings. “I have no insider information as to when the judge is going to rule. It’ll come when the judge is ready.”
But the executive is hoping a ruling in the price of the remaining stake inheld by the Voluntary Employees’ Beneficiary Assn., an independent fund set up to cover retiree health-care costs, will come shortly, possibly by tomorrow.
Chrysler today posts second-quarter earnings of $507 million, up 16.3% from like-2012. The American manufacturer saw its net revenue rise to $18.0 billion for the quarter, up 7.1% from year-ago.
While Marchionne credits Chrysler’s improved fortunes to the success of the Jeep Grand Cherokee, a global volume SUV, and the Ram 1500 pickup, which has seen an increase in deliveries as the American economy rebounds, the auto maker suffers a setback with the planned launch of the midsize Jeep Cherokee SUV.
Crafted as the next step in building Jeep as a global player, the new Cherokee now will launch in September instead of August. A media preview of the SUV was abruptly canceled this week.
Marchionne points to fine-tuning calibration issues with the Cherokee, which debuts with a-designed 9-speed transmission, as part of the delay. Production of the vehicle was supposed to begin in April, but that also was delayed to the end of June.
“We keep on tweaking and finalizing the car,” he tells reporters and analysts.
But “the house overall is in good shape. We remain on track to make the numbers we outlined in the beginning of the year.”
Worldwide,nets €22.3 billion ($29.6 million) in revenue, an increase of 4% from year-ago. Net profit for the second quarter was €235 million ($311.8 million).
“The machine is back on,” Marchionne says, pointing to the new product launches under way or nearing.
Paramount to the Fiat-Chrysler’s long-term success are the redesigned Maserati Quattroporte and well-received Maserati Ghibli, as well as the Ram 1500 pickup.
“There’s zero concerns about the ability of Ram to compete,” the CEO says. “I understand the competition is fierce.”
Marchionne also briefly responds to criticism of the headlight design in the forthcoming Alfa Romeo 4C sports car, which has been derided in the enthusiast press.
Critics were confounded by an insect-eye-style design for the headlights instead of a singular bulb, but Marchionne says the move saved the company $4 million in production and development costs.
“It was my decision,” he says. “If you’re buying that car because of the quality of the headlights, you’re in trouble.”