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Chrysler loss near $2 billion, mostly on restructuring

From freep| May 16,2007
Chrysler loss near $2 billion, mostly on restructuring For the first three months of the year, the Chrysler Group this morning posted a loss of near $2 billion.

The size of the loss is in large part due to restructuring charges of $1.2 billion, DaimlerChrysler said in a statement.

The U.S. unit is undergoing a turnaround plan that includes eliminating 13,000 jobs. It lost $1.5 billion last year, a figure restated to $680 million because of a change in accounting procedures.

It was announced Monday that the Auburn Hills-based unit of DaimlerChrysler is being sold to a private equity firm called Cerberus Capital Management.

Cerberus is paying $7.4 billion to acquire a near 80% in Chrysler while DaimlerChrysler, which will be renamed Daimler AG, will keep about 20%.

A year ago, the Chrysler Group made $857 million in earnings before interest and taxes during the first quarter.

That first quarter was helped by changes to the unit’s health care program offered to employees and retirees that saved $522 million.

DaimlerChrysler expects Chrysler to lose $2.1 billion in 2007, including $1.3 billion in charges for the recovery plan unveiled in February, the company said this morning.

Overall DaimlerChrysler AG earned $2.7 billion in the first quarter compared to $1.6 billion in the first quarter of 2006.

Much of the income -- $2 billion -- was because DaimlerChrysler sold a stake in EADS, the company that makes Airbus.

Daimler’s Mercedes Car unit earned $1 billion to a $983 million loss in last year’s first three months.

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