Tuesday, 05 May 2020 22:27

FCA Wants to Restart Plants Week of May 18, After Losing $1.84B in Q1

Written by Breana Noble, The Detroit News


Its average transaction price climbed nearly 7% to $40,894, a record for the first quarter, according to Kelley Blue Book, though incentives spending rose 12% to $4,986 per vehicle.


Ram was the only brand to see a sales increase, with its pickups climbing 7%, but it was not enough to stop GM's Chevrolet Silverado from regaining its sales lead.


"When I look at vehicles we're selling, clearly it's dominated by what I would call vehicles that are required for work, so maybe not as discretionary as replacing a sedan or something like that," Manley said. "That's why truck sales have held up. Some of the heavier, large SUVs have held up, as well."


Gains in U.S. market share in April, however, have reduced the company's inventory level to about 470,000 vehicles, Manley said. As a result, some configurations, especially among trucks, may be unavailable.


Fiat Chrysler's first-quarter adjusted pre-tax earnings in North America were $594 million, a 48% decrease. It lost $293 million in Europe, $63.9 million in Asia and $29.3 million in Latin America. The Maserati luxury brand lost $81.3 million.


Fiat Chrysler's industrial-free cash flow dropped to a negative $5.5 billion. Cash is critical for automakers to weather the production shutdown and is an asset analysts are watching closely. Available liquidity totaled $20.2 billion at the end of the first quarter.


The automaker has taken several steps to preserve cash. It took out a loan of $3.8 billion in credit facilities in April. A resolution on a $1.2 billion dividend has been postponed to late June along with FCA's annual general meeting.


In addition to halting some projects and lowering marketing spending, executives are taking pay cuts and salaried employees are seeing 20% of their incomes deferred for up to three months. Overall personnel costs halved during the plant shutdown.


The company approximates a $1.08 billion decrease in capital expenditures and $2.17 billion in eliminated operating costs for the year.


Manley also advocated for some sort of stimulus to help kickstart vehicle sales. He also emphasized the need for leniency when it comes to carbon emission standards, especially in Europe.


"I think the regulators," he said, "really need to do something to recognize what happened and to make sure we get back to a level playing field to enable people to make the transition to Euro 6d in a controlled way without destroying prices."


Fiat Chrysler last reported a net loss in the third quarter of 2019 because of expenses related to changes in plants in Europe and at its premium Alfa Romeo brand, but the company had record pre-tax earnings in North America for those three months.


Fiat Chrysler's 2020 first-quarter results beat Ford's, which last week reported a net loss of $2 billion on revenue of $34 billion for January, February and March. GM on May 6 is scheduled to report its first-quarter financial results. Silicon Valley electric-car maker Tesla Inc. eked out a $16 million net profit.


We thank The Detroit News for reprint permission. 

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