Thursday, July 31, 2008

Chrysler loses $431 million

Automaker gives results after Daimler data


Chrysler LLC released financial figures Thursday that indicate the automaker lost $431 million in the first three months of this year.

The Auburn Hills automaker's decision to officially release limited financial figures is a first since going private last August and comes in the form of a clarification to financial statements issued early Thursday by minority owner Daimler AG.

"Chrysler LLC has a clear strategy to build a profitable enterprise for the long term as an independent company, even in this challenging economy. Our full-year plan for the market in 2008 has been aggressively conservative, allowing us to be better positioned for the current slowdown," said Shawn Morgan, a Chrysler spokeswoman. "Despite the challenges, Chrysler continues to meet or exceed its plan on all financial metrics."

Daimler, which has maintained a 19.9% stake in Chrysler Holding LLC, the umbrella organization that includes the automotive business and Chrysler Financial, announced it lost 373 million euros, worth $585 million at today's exchange rate, on its share of Chrysler, primarily during the first quarter of 2008.

That would imply that Chrysler Holding lost $2.9 billion under European accounting standards as used by Daimler. (Daimler reports most of Chrysler's financial results on a three-month delay.)

Chrysler executives have argued strongly against using Daimler's numbers to judge the Auburn Hills automaker's finances, saying the differences between U.S. and European accounting standards are too different for a fair comparison. In the past, however, Chrysler as a private company never officially released its own numbers. As a privately held company, it is not required by the Securities and Exchange Commission to report audited financial results.

Thursday marked a change.

According to a Chrysler statement: Daimler's stake in Chrysler Holding experienced a net loss of 65 million euros -- $102 million -- under a U.S. accounting standards. Of that, Chrysler said 55 million euros -- $86 million -- came from its automotive business.

This would imply Chrysler Holding as a whole lost $509 million, of which Chrysler LLC lost $431 million.

Chrysler attributed the differences between Daimler's stated loss of 373 million euros and Chrysler Holding's accounting loss of 65 million accordingly:

• A 130-million euro adjustment for differences between accounting

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