Outlook for Chrysler is expected to stay bleak

Chrysler LLC's cash flow is likely to remain negative until an upturn in the nation's construction market and pickup sales, according to a report issued Tuesday by Fitch Ratings.
The rating agency also said it expects Chrysler to continue with a strategy that could involve shutting down more assembly plants.

The rare public analysis of Chrysler's financial health came Wednesday when Fitch downgraded its credit rating on Chrysler LLC, and warned that its outlook for the automaker's ratings is negative.

The sour economy, Chrysler's market share losses, and decisions to eliminate poor-selling models, cut production and scale back on fleet sales have all pushed down vehicle sales and revenues for the Auburn Hills automaker and led the agency to cut its ratings on Chrysler to B from B-plus.

"Chrysler's restructuring efforts remain on track, and liquidity is expected to remain adequate over the near term to fund restructuring costs and operating losses through a period of economic weakness," Mark Oline said in a note.

Since Chrysler went private in August, it's been hard to judge its financial status against publicly traded peers such as Ford Motor Co. and General Motors Corp., both of which, according to Brian Bertsch, a Fitch spokesman, the agency has rated as B with negative outlooks — the same as Chrysler.

Chrysler's sales are down 18% so far this year compared with last year. Sales of light trucks — the pickups, SUVs and minivans that dominate Chrysler's lineup — are down 23%. Detroit Free Press