Fiat Chrysler lost about $1.8 billion (1.7 billion euros) in the first quarter as the coronavirus pandemic caused rolling shutdowns of its plants in China, Europe and North America.
Despite the "unexpected and unprecedented times" due to Covid-19, the company, said Tuesday that it and French automaker PSA Group "remain committed" to a previously announced merger of equals. The deal, according to Fiat Chrysler, is expected to close by the end of this year or early 2021.Â
Fiat Chrysler also said it expects to restart the majority of its North American plants the week of May 18. The company as well as General Motors and Ford Motor have been in discussions with the United Auto Workers union for weeks to reopen U.S. plants, which shuttered in March.
Fiat Chrysler CEO Mike Manley told investors during a conference call Tuesday that the new restart date is a result of the company working with the UAW as well as local government officials where its plants are located.
UAW President Rory Gamble, in a statement, said the union continues to talk with all of the companies, however he did not outright oppose the plans as he previously had regarding an early May restart.
"As for the start date, the companies contractually make that decision and we all knew this day would come," he said. "Our UAW focus and role is and will continue to be, on health and safety protocols to protect our members."
Revenue during the first three months of the year fell 16% to about $22.3 billion (20.6 billion euros) while global vehicle shipments plummeted 21%. Before taxes and one-time adjustments and charges, the company reported a profit of about $56.4 million (52 million euro) for the quarter. Fiat Chrysler reported a net profit of 508 million euros ($551.7 million) in the first quarter of 2019. Its adjusted pretax earnings were 1.1 billion euros ($1.2 billion) a year ago.
Fiat Chrysler burned through about $5.5 billion (5.1 billion euros) in cash during the first quarter as the coronavirus pandemic first shuttered its operations in China, followed by Europe and then North America. The company's plants in China have reopened. It continues to restart operations in Europe and elsewhere.
The company said it had about $20.2 billion (18.6 billion euros) in available liquidity at the end of the first quarter. It also established a roughly $3.8 billion (3.5 billion euros) emergency credit facility last month.
Manley said the automaker has sufficient liquidity "beyond" 2020, however the automaker said it could tap into additional credit facilities.Â
"We continue to assess all funding options and expect to access funding as and when available on reasonable terms to further strengthen our balance sheet and enhance our liquidity to optimize our financial flexibility," the company said in a release.
Fiat Chrysler, Manley said, has identified about $2.2 billion (2 billion euros) in operational cuts for this year as it reevaluates its global business due to Covid-19. That's in addition to reducing capital expenditures by about $1.1 billion (1 billion euros) for the year.
Fiat Chrysler, according to CFO Richard Palmer, expects the second quarter to be the company's worst of the year with a "significant" adjusted loss before taxes and negative free cash flow. He declined to provide specific expectations during a call with investors.