Fiat Chrysler Automobiles (FCA) has seen first-quarter loss of $1.8 billion and warned of a “significant” loss this quarter, even as it plans to reopen its most profitable North American truck plants on May 18 as coronavirus lockdowns ease.
The Italian-American company, which has struck a $50 billion merger deal with France’s PSA Group to form the world’s fourth largest automaker, said on Tuesday that work on the tie-up was moving “incredibly well”.
On a conference call, CEO Michael Manley stated that “the terms of the deal have not changed” and FCA is committed to finishing the transaction by the end of this year or early 2021.
Auto sales throughout the world have declined as measures to contain the coronavirus pandemic forced production lines to close and showrooms to close as well, leaving automakers to try conserving cash.
Manley stated a planned 1.1 billion euro ($1.2 billion) dividend was going through a review, as part of FCA’s efforts. The company also scrapped its full-year revenues forecast.
FCA has started reopening plants in China and Europe, and said majority of its North American ones were expected to resume on May 18.
In the United States, UAW president Rory Gamble replied the planned restart by saying automakers should implement and follow the guidelines due to the spread of the Covid-19 coronavirus, in an effort to look after worker safety and that the union had worked out with them. The union had objected to automakers’ original strategy to reopen in early May.
Most of FCA’s revenue and profit comes from North America, where quarterly sales of its Ram truck brand increased 7% from the previous year and its share of the full-size pickup market increased to 24%.
Capital expenditure increased in the quarter, due to spending on the new Jeep Wagoneer and Grand Wagoneer, and remodified Jeep Grand Cherokee models. But executives stated full-year capex estimates would be cut down by 1 billion euros as key program launches had been delayed by an average three months.
