Sergio Marchionne, chief executive of Chrysler and partner Fiat SpA, said that the interest on government loans is preventing the company from reporting net income this year, although it had reported operating profit in each of the first three quarters. It would be "psychologically important" for the company to be able to report net income, yet he would not say if it were possible.
"The important thing is we come to a conclusion of the type of capital structure," he said of the need to find lower interest loans for the cash needed to overhaul the product lineup.
Chrysler is launching 16 all-new or revamped vehicles for the 2011 model year, with most of them already on display at the LA Auto Show, which opens for the media tomorrow.
The CEO wants a "firm idea in the first half" of possible financial solutions he can execute in the second half of 2011. The company is already negotiating with financial institutions, but any refinancing must provide the same level of comfort as the government loans.
"If the market gives us access to both debt and equity, we can deal with both issues," he said. Marchionne also said he wants to have financial results for the first half of 2011 out before an initial public offering.
"Until I have these in the bank, the IPO would be ill-advised," he said of future earnings performance. The CEO added that he wants to let the General Motors' IPO run for some time and achieve some stability in the market before Chrysler goes public.
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