Chrysler Still Losing Money

Chrysler has a third quarter loss of $84 million (on revenues of $11 billion from 401,000 vehicle sales), although the company does have an "operating profit" of $239 million and a much smaller loss than last quarter. The difference between the operating profit and the net loss is mostly due to an $309 million interest expense. for the quarter.

Thus, the Chrysler's operating profit margin is 2.2% and its net losses are about about 0.8% of revenues. Chrysler's operating profit per vehicle in the third quarter was $529, compared to $2,710 for Ford in the third quarter. Chrysler needs about $210 more of operating profit per vehicle to become actually profitable.

In short, Chrysler needs to do only a little better than it is doing now to be profitable, despite having the worst quality vehicles sold in the United States and having done far less their either GM or Ford to reform itself in ways visible to the public yet. And, some of its restructuring efforts (like its move to offer Fiat cars) haven't yet come to fruition. So, Chrysler will probably survive, and this has been the first quarter that this has been really clear.

Chrysler doesn't, however, look ready to make big payments of its bailout debts any time soon. It took out more debt for operations and secured bigger credit lines from government lenders in the U.S., Canada and Mexico over the last quarter.

"About 80% of the [Chrysler] auto maker's dealers said they were profitable in the third quarter." Presumably, this doesn't include the many Chrysler dealers that were shut down in the bankruptcy reorganization.