Newspaper article St Louis Post-Dispatch (MO)

Chrysler Profit Zooms Past Record Minivans Helped Automaker Earn $3.7 Billion in '94

Newspaper article St Louis Post-Dispatch (MO)

Chrysler Profit Zooms Past Record Minivans Helped Automaker Earn $3.7 Billion in '94

Article excerpt

Chrysler Corp. showed a profit of $3.7 billion last year, by far the highest in the history of the 69-year-old company.

Propelled by sales of minivans, sport utility vehicles and a new line of cars, Chrysler is sitting on a pile of cash, has cut its debts and is getting ready to spend billions of dollars on future vehicles.

Chrysler, which flirted with bankruptcy in the early 1980s and again in 1991, was not shy about its turnaround.

"Chrysler had an outstanding year in 1994 in just about every respect," said Chairman Robert Eaton. "We enjoyed record sales worldwide and record earnings.

"We fully funded our pension obligations and still surpassed our targeted cash position of $7.5 billion.

"We improved our credit rating, and we increased our five-year product development budget from $20.8 billion to $22.9 billion."

One sign of Chrysler's new-found health: It has fully funded its pension plan for the first time since 1957.

"We successfully launched our new Neon subcompacts, our Cirrus and Stratus sedans, our Chrysler Sebring, Dodge Avenger and Eagle Talon sport coupes and maintained strong momentum in our other product lines," Eaton said.

Although Chrysler is flush, the automaker still faces some unknowns.

A key vehicle - the new minivan to be built in St. Louis later this year - must succeed if Chrysler is to retain its worldwide leadership in minivans.

Other automakers, especially Ford, are looking to take a piece out of Chrysler's dominance in minivans.

And the newly introduced Neon subcompact, while selling well, has encountered some price resistance from buyers.

The average Neon was to have sold for about $12,500. But the company began loading recent Neons with accessories that pushed the price past $15,000 and sharply cut sales. Now Chrysler is cutting back on the Neon's options.

Unlike Ford and General Motors, Chrysler had been limited to selling its vehicles in North America. …

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