Chrysler Group LLC next month will report a second-quarter operating profit, Sergio Marchionne, chief executive of Chrysler and partner Fiat SpA, said Wednesday.

It marks the second consecutive uptick for Auburn Hills, Mich.-based Chrysler, which lost $197 million in the first quarter but showed signs of a turnaround with an operating profit of $143 million. The results show continued growth for a company that suffered a net loss of $3.785 billion in 2009, the year it used bankruptcy to shed debt, The Detroit News reported.

Analyst Erich Merkle, president of Autoconomy in Grand Rapids, said “Chrysler is doing remarkably well in sales.”

Even though many of its vehicles are sold as part of fleet orders, with lower margins, they likely are profitable for the downsized automaker, he said.

“They are likely making money from fleet sales now, while it was impossible to do before bankruptcy,” Merkle said.

Fleet sales also buy time until Chrysler gets its new and updated vehicles to market. Many are arriving in the fourth quarter.

Chrysler will report its second-quarter earnings Aug. 9, Marchionne said Wednesday in a call to release Fiat’s earnings.

Fiat surprised analysts with its strong quarterly profits, largely on the strength of the agricultural and industrial divisions that will be spun off from the automotive group by Dec. 31. Net profit was $115.6 million, compared with a loss of $215 million in second-quarter 2009. Net revenues were up 12.5 percent, to $19 billion.

The company may raise its 2010 forecasts in the third quarter, Marchionne said.

He has also said he expects to raise Chrysler forecasts, if the new 2011 Jeep Grand Cherokee sells well.

Marchionne gave the Fiat update from Auburn Hills, where he hosted the Fiat board this week. Board members visited Chrysler’s headquarters and toured the Jefferson North Jeep plant in Detroit, which has implemented Fiat’s World Class Manufacturing system, focusing on eliminating waste and bottlenecks.

“The board was here and had an opportunity to visit the Jefferson North plant to see the first visible signs of World Class Manufacturing in the American context,” Marchionne said.

Tuesday night, the board approved a plan, announced in April, to separate its industrial holdings into a new company. The split is intended to better realize the value of the different types of business within the Fiat Group.

Fiat will consist of automotive units including Fiat, Lancia, Alfa Romeo, Ferrari and Maserati and the powertrain and components divisions that support them.

The success of Fiat as an automotive-only entity relies heavily on its partnership with Chrysler.

“It also confirms Marchionne’s commitment to Chrysler,” Merkle said.

The new company, to be called Fiat Industrial SpA, includes the Iveco commercial and truck division and CNH, which makes agricultural and construction equipment and their engine units.

A special shareholders meeting will be held Sept. 16 to vote on the split. Shareholders will receive equal stakes in both companies, and net debt will be split evenly between the two.

“We are looking forward to new life on Jan. 1 as two companies,” Marchionne said.

Deutsche Bank analyst Jochen Gehrke said Fiat’s results were stronger than expected.

“The execution of management in a highly challenging environment is remarkable,” Gehrke said in a report.

Nonetheless, Moody’s Investors Service put Fiat’s ratings under review for possible downgrade.

“Today’s rating action was solely triggered by the approval of the de-merger plan,” said analyst Falk Frey.

Marchionne also announced assembly of a multipurpose vehicle for Europe will start in Serbia rather than Italy because of an inability to negotiate terms with labor unions. He reveals his hard-line stance a year before negotiations with the United Auto Workers.

Colleen McDonald of Northville won one arbitration case to reopen her Livonia Chrysler-Jeep dealership, but lost her bid to reopen Century Dodge in Taylor, the Detroit Free Press reported.

“It’s bittersweet,” McDonald said today after learning of arbitrator Tracy Allen’s split decision. “I am excited about winning one, but I though we could win both of them.”

McDonald becomes the third former Chrysler dealer to prevail through arbitration. The other two are Bill Hahn of Village Chrysler-Jeep in Royal Oak and Bruce Campbell, who plans to reopen his Dodge showroom in Redford Township.

The only woman owner of a Chrysler, Jeep or Dodge franchise in metro Detroit, was among the 789 dealers Chrysler terminated in June as part of its government-backed restructuring. She also had closed a Chevrolet dealership in Farmington Hills.

She said she employed about 125 people between her Chrysler-Jeep and Dodge businesses. Initially she plans to hire between 40 and 50 to reopen Livonia Chrysler-Jeep on Plymouth Road to get sales and service departments up and running.

Chrysler said that of 418 arbitration cases initiated, more than 125 were dismissed or withdrawn and 150 were settled. Of 97 arbitrators’ decisions rendered so far Chrysler prevailed in 69 cases, dealers won 28. Nine decisions are pending, including that of Joe Ricci, whose Dodge dealership in Dearborn has closed. Only one case has yet to be heard.

“The decisions of a great majority of the arbitrators validate that our dealer network plans are not only appropriate, but essential to Chrysler’s future success,” the company said in a statement.

From 3,200 dealers before it filed for Chapter 11 bankruptcy on April 30, 2009, Chrysler now has 2,315 dealers, said spokesman Mike Palese. The automaker intends to have 2,300, each selling Chrysler, Dodge, Jeep and Ram truck models by the end of 2011.

The American Arbitration Association has said it wants to resolve all Chrysler dealer arbitrations by the end of July.

DETROIT – Chrysler Group LLC said today it will offer consumers a 60-day, money-back guarantee on new vehicles and also make the first two months of payments for buyers, as it tries to shore up sales amid lackluster consumer confidence, Reuters reported.

The offer expands on Chrysler’s Minivan Pledge, a 60-day money back guarantee on the Chrysler Town & Country and Dodge Grand Caravan. Chrysler launched the Minivan Pledge in February and it expired July 6. But the two minivans are included in the new program, which covers most Chrysler vehicles.

Chrysler said consumers will be allowed to return a new vehicle within 60 days if they are not happy with the purchase and the company will pay up to $500 per month for the first two months.

In addition, Chrysler will offer interest-free loans for up to sixty months on most 2010 Chrysler, Dodge, Jeep and Ram vehicles when financed through GMAC Financial Services for the month of July.

The only vehicles not included in the money-back offer are the Dodge Viper and Jeep Wrangler.

“We build great vehicles for just about any lifestyle and with this pledge, consumers will have the confidence to know they made the right purchase or they can return the vehicle no questions asked,” Chrysler U.S. sales chief Fred Diaz said in a statement.

Two Denver-area auto dealers that Chrysler Group had sought to drop as part of a massive reorganization have won at arbitration, Forbes.com reported.

Medved Autoplex in Castle Rock and the Phil Long Jeep-Chrysler dealership in Denver would rejoin Chrysler’s dealer network if they meet standard requirements for dealers, Chrysler said.

“That’s outstanding news,” Colorado Automobile Dealers Association President Tim Jackson said.

Dealership representatives weren’t immediately available for comment Monday, but Jackson said he expected both dealerships would try to rejoin Chrysler’s network.

Chrysler said the Medved dealership in Jefferson County lost at arbitration. Earlier, the automaker won cases involving two other Colorado dealers and settled with King Auto Group in Longmont.

WASHINGTON – In the first lawsuit of its kind, a closed Missouri dealership that prevailed in arbitration over Chrysler Group claims that it received a letter of intent that violates the federal dealer arbitration law, Automotive News reported.

Century Motor Corp., of Wentzville, contends that dealerships seeking reinstatement have to meet conditions not required of the thousands of Chrysler dealerships that were never terminated.

The requirements also were not imposed on dealerships awarded franchises after bankruptcy and before the arbitration law was enacted in December, according to the complaint, filed Thursday, June 17, in U.S. District Court in St. Louis.

The suit says letters of intent given to terminated dealerships that filed arbitration claims should be the same as those given to stores that survived Chrysler’s bankruptcy.

Chrysler confirmed today that the suit was the first filed over a letter of intent received by a terminated dealer in arbitration. The automaker, controlled by Fiat S.p.A. since its government-sponsored bankruptcy a year ago, declined additional comment.

“We were outraged by the letter of intent,” Kevin Mock, Century’s general manager, said in an interview with Automotive News. “We have 20 years and millions and millions of dollars invested in this franchise, and we couldn’t just sit back and wait for something to happen.”

After receiving the letter of intent, the dealership and its lawyer tried to negotiate with Chrysler over the terms but were “stonewalled,” Mock said. The dealership, located in a suburb of St. Louis, is owned by John Mock, 62, and his brother Frank, 54.

A year ago, Chrysler closed 789 dealerships, or a quarter of its dealer network. In January, about 400 of the rejected stores gave notice of their intent to file arbitration claims.

The latest letters of intent violate the federal law’s mandate that they be “customary and usual,” Century Motors’ suit alleges.

Under the arbitration law, Chrysler and General Motors have seven business days after an arbitration loss “to provide the dealer a customary and usual letter of intent to enter into a sales and service agreement.”

“Chrysler is intentionally, knowingly and willfully thwarting the law,” claims the seven-page suit filed by Century’s attorney, Allen Press of the Green Jacobson law firm in St. Louis.

One different provision in the new letter of intent would nullify the letter if an existing dealer protested the addition of Century and this protest were not dismissed or denied in 30 days, the complaint alleges.

Another provision would forbid Century to protest if a new dealership were added to its market, the suit claims.

Dealerships must sign letters of intent if they are to be reinstated via franchise agreements, also known as sales and service agreements.

Chrysler has issued letters of intent to two sets of rejected dealerships that filed arbitration claims: the 50 that were given these letters in March and April, before their arbitration hearings were held, and many of the 11 that have won in arbitration since April.

A number of the 50 that received letters of intent this spring said at the time that they didn’t intend to sign them because of some of the same provisions cited in Century’s suit.

Chrysler Group LLC’s Jeep brand will become the subsidiary’s primary global make in the first half of next year as Fiat SpA emphasizes the Lancia nameplate in Europe, a top executive told Bloomberg.

Chrysler’s minivan, Sebring and 300 models will be rebadged as Lancias across most of Europe at the end of the first quarter or early in the second, Michael Manley, Chrysler Group’s international chief, said in an interview. Sharing models among the brands is part of a plan outlined by Fiat and Chrysler CEO Sergio Marchionne in November, Manley said.

Chrysler aims for Jeep to account for half of Chrysler Group’s international sales, up from closer to a third historically, he said. The goal will be to have two brands — Jeep and one other — from the Chrysler Group in every market, Manley said at an event to introduce the new version of the Jeep Grand Cherokee last week in California.

“The brand is global, it’s very well known everywhere around the world,” Manley said. “With our partnership with Fiat we can now focus on Jeep as an international brand.”

Fiat, which also owns Maserati and Ferrari, is trying to share engines and other parts among models from Fiat, Chrysler, Dodge, Jeep and Alfa Romeo brands to save $2.9 billion over five years. Fiat controls the U.S. automaker through a 20 percent stake granted as part of last year’s U.S.-backed bankruptcy.

In Europe, some Dodge models will also be sold and the Chrysler name will be kept on the minivan in the U.K., Manley said. Most of Lancia’s approximately 125,000 sales annually are in Italy. Chrysler-badged vehicles will continue to be sold in Latin America and Asia, while the North American use of Chrysler won’t change, he said.

Marchionne said April 21 that he plans to double revenue from cars and light-commercial vehicles to 51 billion euros ($63 billion) by 2014. Turin, Italy-based Fiat aims to boost deliveries by 73 percent in the period by expanding in Europe and emerging markets, re-entering North America and relaunching the Alfa Romeo and Lancia brands.

Fiat has a worldwide sales target of 3.8 million cars and commercial vans in 2014, compared with 2.2 million last year, Marchionne said April 21 in a strategy presentation. Combined with Auburn Hills, Michigan-based Chrysler Group, deliveries would total 6 million cars.