Newspaper article The Florida Times Union

With New Truck Models, Fiat Chrysler Sees Profits Topping Ford's

Newspaper article The Florida Times Union

With New Truck Models, Fiat Chrysler Sees Profits Topping Ford's

Article excerpt

Byline: Tommaso Ebhardt, Jamie Butters & Keith Naughton Bloomberg

Fiat Chrysler Automobiles has committed to meeting ambitious 2018 financial targets set by its outgoing CEO, as a fruitful shift to pickups and SUVs may boost profits beyond those of bigger Ford.

Adjusted earnings before interest and taxes (EBIT) will climb to at least $10.8 billion this year, at the lower end of a profit range targeted in a fiveyear business plan. That would top Ford's projected EBIT of as much as $9.2 billion.

Chief Executive Officer Sergio Marchionne has bolstered profit at Fiat Chrysler by converting car plants to manufacture more lucrative sport utility vehicles and trucks. It's a playbook that Ford has signaled it will imitate, after years of coming up short of earnings targets. For Fiat Chrysler, new versions of the Jeep Wrangler SUV and Ram 1500 pickup, plus a refreshed Jeep Cherokee, are slated to begin selling in the first few months of this year.

"There's a very strong likelihood that we will outperform Ford in terms of operating earnings in 2018," Marchionne told analysts on a conference call Thursday. "That's something that if I told any of us in the room here that would've been doable five years ago, nobody would have believed it."

In fact, Marchionne had said in 2012 the Dearborn, Mich.based automaker's truck business made him "drool."

"Everybody in this business has dreams at night," he said at the time. "I dream of selling as many pickup trucks as Ford."

While Ford refocuses on costcontainment as it retools its lineup, Chief Financial Officer Bob Shanks pointed out that the secondlargest U.S. automaker, behind General Motors Co., is investing billions of dollars in an expanded offering of electric cars and autonomousvehicle technology.

"We're in a long term race and we believe we have a winning hand for the long term," Shanks said Thursday in an interview. "We are where we are this year. It underscores again the importance of delivering on our fitness initiatives. But it also reflects the investments we are making around electrification, AVs and connectivity to win in a world that's going to be quite different than it is today. …

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