DaimlerChrysler Beats Competitors, CEO LaSorda On Track

Tom LaSorda may not be sleeping much these days (Forbes is reporting 20 hour workdays), but he’s probably still sleeping well. Chrysler’s (DCX) posted operating losses of $1.5 billion pale in comparison to when compared to Ford’s (F) nearly $13 billion loss last year and GM’s (GM) loss of $12 billion over the previous two fiscal years. But furthermore, he’s running off with a new plan:

Transform the regional manufacturer of trucks, SUVs and minivans into a larger global player through a series of partnerships with companies like China’s Chery Automobile Co.

The new business model, he says, will reduce vehicle development costs and allow Chrysler to expand internationally. [Forbes]

However, those plans might not mean much if a rumored DaimlerChrysler AG deal goes through to sell Chrysler off to private equity groups (like Cerberus Capital Management, Blackstone Partners and Centerbridge Partners) or other interested buyers (including a $4.5-billion offer in cash by former GM stockholder Kirk Kerkorian’s Tracinda Corp.). Yet, judging from the way things are shaping up at Chrysler, it would be foolish for DaimlerChrysler to sell off their American family. LaSorda’s corporate re-organization and streamlining to cut costs is promising big figures and profitability by next year. It comes at a price though: “cutting $1.5 billion in material costs, reducing production capacity by 400,000 units and eliminating 13,000 hourly and salaried jobs.”

UAW President, Ron Gettelfinger, seems to agree:

Chrysler is implementing a turnaround plan aimed at returning to profitability after posting an operating loss of $1.5 billion last year. It seems to me that both the Chrysler Group and DaimlerChrysler as a whole would be better served if we focused on moving forward with the plan that is in place and building a quality product, then worrying about the future,” he said.

He noted DaimlerChrysler as a whole did well last year, when the company’s net income rose 13.2% to $4.3 billion.

“We’re in a little downturn right now,” Gettelfinger said about Chrysler. “But if you compare what happened at DaimlerChrysler last year, the end result, and compare that to Ford and General Motors when they reported their losses, it’s like hardly anything.” [Detroit Free Press]

All in all, DaimlerChrysler’s stock performance has been significantly better in comparison to its domestic rivals, Ford and GM and with a recent announcement to come out and invest $1 billion in new axle and engine plants in Michigan (part of a $3 billion initiative to expedite the development and production of fuel-efficient vehicles), Chrysler is spending money where it needs to.

DCX/GM/F 1-yr comparison chart

Disclosure: none