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Fiat Chrysler shows big profit boost for 2017; workers get $5,500 each

Eric D. Lawrence, Detroit Free Press on

Published in Automotive News

DETROIT -- Fiat Chrysler Automobiles on Thursday released its earnings for 2017, showing profits up 93 percent for the year and announcing that eligible employees will get profit-sharing checks averaging $5,500 this month.

The company, which has its U.S. headquarters in Auburn Hills, Mich., reported pretax profits of $4.4 billion (3.5 billion euro). Adjusted earnings per share of $3 (2.41 euro) were an increase over $2 (1.64 euro) during 2016.

The earnings results beat the $1.9 billion (1.8 billion euro as released last January) in net profits the company reported for 2016. It was also significantly better than the $100 million (93 million euro) the company, citing restructuring and recall costs, announced for 2015, according to previous Free Press reports.

The profit-sharing payments, which the company said were a result of strong financial performance for the year, are also an increase over the $5,000 checks released for 2016.

About 40,000 United Auto Workers-represented employees are to receive their checks on Feb. 16. That money is in addition to the $2,000 bonuses FCA announced when the company said earlier this month that it would be shifting production of Ram Heavy Duty trucks from Mexico to the Warren Truck Plant in 2020.

The company highlighted strong performance in North America, Latin America and Europe as well as improvements in its components divisions and in its Maserati brand.

The company also noted that it "nearly doubled its fourth-quarter net income and slashed its closely watched net industrial debt almost in half to $2.98 billion (2.4 billion euro), helping Chief Executive Sergio Marchionne meet the company's full-year forecast."

FCA reported improvements in its pretax profits across all regions from 2016, to $6.49 billion (5.23 billion euro) in North America from $6.37 billion (5.13 billion euro), $187 million (151 million euro) from a $6.2 million (5 million euro) in Latin America, $213 million (172 million euro) from $130 million (105 million euro) in Asia and $912 million (735 million euro) from $670 million (540 million euro).

 

The improvements came despite a U.S. sales drop of 8 percent for the year to 2.1 million vehicles, but the company has attributed that decline primarily to reductions in sales to lower-margin rental fleets.

Edmunds noted that the company had a challenging year, dropping "nearly a full percent of market share in 2017" and with incentives up 18 percent, but that new products could improve its outlook for 2018.

"Considering the strength of the Jeep brand and the incessant consumer demand for SUVs, FCA does have some of the right building blocks for success. The new Ram 1500 and Jeep Wrangler are both getting positive initial reviews, so if FCA can nail the launches of their bread-and-butter products, it will give the company a needed bright spot in 2018," according to Jessica Caldwell, executive director of industry analysis for Edmunds.

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