DETROIT - Chrysler Group LLC is generating the cash needed to rebuild its product portfolio as sales gain momentum, Chief Executive Officer Sergio Marchionne told employees.
Mr. Marchionne sent an e-mail to employees yesterday on the one-year anniversary of Chrysler's emergence from bankruptcy. He said the company's alliance with Fiat SpA is "taking root" by cutting costs and increasing revenue from outside North America.
Chrysler emerged from a U.S. government-sponsored bankruptcy on June 10, 2009, under management control of Fiat, which has a 20 percent stake in the U.S. automaker. In return, Fiat is providing Chrysler with fuel-efficient engines and technology.
"We are generating the cash needed to build our brands and invest in products," Mr. Marchionne said in the memo. "Our sales are building momentum, with substantial year-over-year increases in the past two months."
Whether Chrysler has the cash to revamp its aging lineup dominated by gas-guzzling trucks and SUVs has been the question surrounding Mr. Marchionne's ambitious five-year turnaround plan.
Chrysler is counting on a new generation of smaller, Fiat-based autos and fuel-efficient vehicles to revitalize its lineup. Its U.S. sales for the first five months of this year were up 8 percent over the same period last year. Its May sales were up 33 percent from the same month last year.