Back from the Brink, Chrysler Looks to Jeep to Drive it Toward Profit

Last Updated Apr 21, 2010 1:34 PM EDT

The next big product launch from Chrysler is the 2011 Jeep Grand Cherokee, a child from a previous marriage.

The new Jeep, which goes on sale soon, shows that despite the somewhat surprising operating profit Chrysler announced today, it's been a long time since Chrysler could stand on its own four wheels. It will be a few more years -- at least -- before it can do so again.

"While we still have a long way to go to rebuild our business, it is important to note that we are on track to achieve our 2010 targets," said Chrysler CEO and Fiat boss Sergio Marchionne, in an e-mail to employees.

Chrysler today said it had an operating profit of $143 million and a net loss of $197 million in the first quarter, versus an operating loss of $553 million and a net loss of about $2.7 billion in the fourth quarter of 2009.

The company avoided comparisons to the year-ago quarter, which presumably would have been even worse, since at the time Chrysler was about to declare bankruptcy, which it did on April 30, 2009. Chrysler came out of bankruptcy last June, to be rescued by Fiat.

Meanwhile, the latest Jeep Grand Cherokee was about to be born. It made its debut at the New York auto show a year ago. Under the skin, the new Jeep shares a common architecture with the Alabama -built Mercedes-Benz M-Class, R-Class and GL-Class. The sharing dates back to the days of the 1998-2007 DaimlerChrysler merger.

The partners were trying to save some money by developing models together that could share costs and some parts, but looked completely different on the outside. That's increasingly common in the global auto industry, but sharing was something Daimler and Chrysler rarely did, and even more rarely did well.

The Chrysler Crossfire, for instance, based on the Mercedes-Benz SLK, was not a big seller. In another example, sharing suspension components between the Chrysler 300 and the Mercedes-Benz E-Class did little to help Chrysler, and could have harmed the Mercedes-Benz brand.

It would be ironic if the 2011 Jeep Grand Cherokee turns out to be the hit that could have saved DaimlerChrysler -- but I doubt it.

Photo: Chrysler