Is Chrysler's Strong Profit a Mixed Blessing for Fiat?


Chrysler produced about 12,000 Jeep Cherokees during the second quarter, but a transmission issue meant that none were shipped to dealers until last week. Photo credit: Chrysler

Chrysler said on Wednesday that it earned $464 million in the third quarter. That was a 22% gain from the $381 million it earned in the third quarter of last year.

That gain came despite major delays in shipping the all-new Jeep Cherokee due to a problem with the model's transmission software. Those delays were expected to hit Chrysler's third-quarter profits hard, but strong demand for the automaker's Ram pickups and its other SUVs was enough to offset the Cherokee's problems.

That's a good result for Chrysler in a difficult situation. But as Motley Fool contributor John Rosevear explains in this video, Chrysler's strong profit is a mixed blessing for majority owner Fiat . The Italian automaker needs those profits to offset its own losses, but if the U.S. company is too profitable Chrysler's remaining shares -- which Fiat very much wants to buy -- could get very expensive.

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