Daimler: Chrysler Lost $2.7 Billion In Two Months
Wed, 02/27/2008 - 10:50am
DETROIT (AP) — Chrysler LLC lost about $2.7 billion (euro1.79 billion) in the two months after Daimler AG sold controlling interest in the U.S. automaker to a New York private equity firm, Daimler said in its annual report Wednesday.
The figure, for the period from Aug. 4, 2007 to Sept. 30, was calculated under international financial reporting standards used in Europe and not under U.S. accounting standards, Daimler said.
The net loss also includes about $466 million (euro310 million) in expenses incurred in the fourth quarter of last year, including Chrysler restructuring costs and costs related to a new four-year contract with the United Auto Workers, Daimler said in its report, filed with the U.S. Securities and Exchange Commission.
Daimler reported that for the full year in 2007, Chrysler lost euro870 million, or roughly $1.2 billion when converted at the euro-to-dollar exchange rate that Daimler reported for the third quarter. It was unclear how much of Chrysler's fourth-quarter results were included in the figure because neither Daimler nor Chrysler would answer questions about the report.
The figures, though, give a glimpse into how Chrysler has performed financially since Daimler sold 80.1 percent of the automaker to New York-based Cerberus Capital Management LP in August. Chrysler now is a privately held company and is no longer required to report its earnings.
Chrysler spokesman David Barnas would not confirm or deny the loss figures as accurate, but said the automaker has ample cash and capital dollars to meet its present and future objectives.
''Since August and the return of Chrysler as an independent company, we have not only been meeting but in many cases exceeding all key metrics,'' Barnas said. ''We are making the tough decisions for the long-term health of the company.''
Daimler spokesman Thomas Frohlich deferred all questions to the annual report.
The difference between Daimler's use of international accounting standards and Chrysler's use of U.S. standards probably would not make a huge difference in the numbers, two accounting experts told The Associated Press.
Robert Willens, owner of a tax and accounting advisory firm in New York, said the two standards are getting closer.
''It's been converging over the years, so there are very few differences at this point,'' he said.
Randy Paschke, chairman of the accounting department at Wayne State University's business school in Detroit, said there could be some exceptions in the way expenses are accrued, but in general the numbers should be close.
''I wouldn't think you're going to have huge differences unless there's a particular issue that came up in that period,'' he said.