Chrysler exec tags year's loss at $1B

12/1/2007

DETROIT - Chrysler LLC is likely to lose $1 billion this year as its new leadership tries to cut costs and streamline the automaker's model lineup, but it's poised to break even next year and make money in 2009 and 2010, according to a top sales executive.

Steven J. Landry, executive vice president of North American sales, revealed part of the now-private company's business plan this week in a speech at Saint Mary's University in Halifax, N.S.

Mr. Landry, a Halifax native who received a bachelor's degree in management from the university in 1982, was at the school to announce that Chrysler Canada would donate $100,000 to two scholarship funds.

He also said the company plans to "right size" itself and reduce its model lineup from 28 to around 20 while focusing on top-quality interiors, according to the Daily News of Halifax.

The automaker, he said, will take in about $64 billion in revenue this year, but it will spend about $65 billion. "You have to come to the realization that in some instances, you've got to stop spending," he said.

Chrysler spokesman Lori Pinter said Mr. Landry was speaking in general terms to a group of marketing and business administration students. She would not say whether the revenue and income numbers he cited were accurate.

She said the statement about model reductions had no time frame, and she said the right-sizing comments do not necessarily mean more layoffs or buyouts. Chrysler last month announced plans to cut up to 12,000 jobs, just after employees represented by the United Auto Workers ratified a new four-year contract with the company.

The cuts include 8,500 to 10,000 hourly jobs and 2,100 salaried jobs through 2008, or about 15 percent of its work force. The cuts came on top of 13,000 Chrysler layoffs announced in February.

Chrysler already has said it will eliminate four products through 2008: the Dodge Magnum wagon, the convertible version of the Chrysler PT Cruiser, the Chrysler Pacifica crossover, and the Chrysler Crossfire sports car. Chrysler became a private company in August when private equity firm Cerberus Capital Management LP became the majority owner.