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| Fiat and Chrysler boss Marchionne defuses double gaffe | Fiat and Chrysler boss Marchionne defuses double gaffe |
| (about 7 hours later) | |
| Sergio Marchionne, who heads carmakers Fiat in Italy and Chrysler in the US, has retracted comments that upset governments in both countries. | Sergio Marchionne, who heads carmakers Fiat in Italy and Chrysler in the US, has retracted comments that upset governments in both countries. |
| On Friday, he called the US and Canadian bail-out of Chrysler "shyster loans" because of the high interest. | On Friday, he called the US and Canadian bail-out of Chrysler "shyster loans" because of the high interest. |
| He also appeared to suggest Fiat could eventually merge with Chrysler, moving its head office from Turin to the US. | He also appeared to suggest Fiat could eventually merge with Chrysler, moving its head office from Turin to the US. |
| Fiat later told the Turin mayor no such decision had been made, while Mr Marchionne apologised to the Americans. | Fiat later told the Turin mayor no such decision had been made, while Mr Marchionne apologised to the Americans. |
| 'Inappropriate' | 'Inappropriate' |
| Speaking at an industry conference in San Francisco, the chief executive used the expression "shyster loan", implying that he felt the interest rate demanded by Washington and Ottawa for rescuing Chrysler in 2009 was exorbitant. | |
| The next day, in a statement published on Chrysler's website, Mr Marchionne expressed his regret for the remarks, which he said had raised concern and which he called inappropriate. | The next day, in a statement published on Chrysler's website, Mr Marchionne expressed his regret for the remarks, which he said had raised concern and which he called inappropriate. |
| He acknowledged that the high interest rate charged at the time of the rescue was appropriate, because nobody else was willing to lend to the bankrupt Chrysler at that time. | He acknowledged that the high interest rate charged at the time of the rescue was appropriate, because nobody else was willing to lend to the bankrupt Chrysler at that time. |
| However, he noted that the company was now able to finance itself in markets at a much cheaper rate, and expected to borrow and repay the government loans "at the earliest opportunity". | However, he noted that the company was now able to finance itself in markets at a much cheaper rate, and expected to borrow and repay the government loans "at the earliest opportunity". |
| Fiat took a 25% stake in Chrysler and took over managerial control as part of the US company's government-sponsored restructuring. | Fiat took a 25% stake in Chrysler and took over managerial control as part of the US company's government-sponsored restructuring. |
| Anger in Turin | Anger in Turin |
| While Mr Marchionne was soothing tempers in the US over the weekend, Fiat's chairman, John Elkann, had to answer angry calls from the mayor of Turin. | While Mr Marchionne was soothing tempers in the US over the weekend, Fiat's chairman, John Elkann, had to answer angry calls from the mayor of Turin. |
| Sergio Chiamparino demanded "immediate clarification" of other comments, also made by the Fiat boss at the same event on Friday, that suggested the Italian firm might relocate its historic headquarters away from his city to the US. | Sergio Chiamparino demanded "immediate clarification" of other comments, also made by the Fiat boss at the same event on Friday, that suggested the Italian firm might relocate its historic headquarters away from his city to the US. |
| "In the next two or three years we will be able to see a single entity," Mr Marchionne was quoted in the Italian newspaper Corriere della Sera as saying, in an apparent reference to a merger of Fiat and Chrysler. | "In the next two or three years we will be able to see a single entity," Mr Marchionne was quoted in the Italian newspaper Corriere della Sera as saying, in an apparent reference to a merger of Fiat and Chrysler. |
| "It could be based here in the United States," he continued. "We'll have to integrate the companies first, though, and then look at the management." | "It could be based here in the United States," he continued. "We'll have to integrate the companies first, though, and then look at the management." |
| Fiat is Italy's biggest private sector employer, with 80,000 staff in the country out of a total of 190,000 worldwide. Turin has hosted the firm's headquarters since it was founded in 1899. | Fiat is Italy's biggest private sector employer, with 80,000 staff in the country out of a total of 190,000 worldwide. Turin has hosted the firm's headquarters since it was founded in 1899. |
| 'No decision' | 'No decision' |
| The mayor later appeared placated after speaking to the company chairman. | The mayor later appeared placated after speaking to the company chairman. |
| "Elkann has explained Fiat's strategy foresees the integration with Chrysler and that there will be more management centres where there is a strong market presence," said Mr Chiamparino. | "Elkann has explained Fiat's strategy foresees the integration with Chrysler and that there will be more management centres where there is a strong market presence," said Mr Chiamparino. |
| He said he was told there would be regional headquarters in Turin, Detroit, Brazil and possibly Asia. | He said he was told there would be regional headquarters in Turin, Detroit, Brazil and possibly Asia. |
| Meanwhile, Italy's welfare minister, Maurizio Sacchoni, also spoke to the company. He reported that Mr Marchionne had assured him that no decision had been made about the global headquarters. | Meanwhile, Italy's welfare minister, Maurizio Sacchoni, also spoke to the company. He reported that Mr Marchionne had assured him that no decision had been made about the global headquarters. |
| A spokesman for Fiat claimed there had been a misunderstanding and that the chief executive was only referring to a possible US stock exchange listing for a hypothetical merged firm. | A spokesman for Fiat claimed there had been a misunderstanding and that the chief executive was only referring to a possible US stock exchange listing for a hypothetical merged firm. |
| "He has a habit of talking off the top of his head," said the spokesman, playing down the comments, which he said were made in response to a question from the audience. | "He has a habit of talking off the top of his head," said the spokesman, playing down the comments, which he said were made in response to a question from the audience. |
| Chrysler plans to return to the New York Stock Exchange via a flotation later this year. | Chrysler plans to return to the New York Stock Exchange via a flotation later this year. |
| The controversy follows previous comments from Mr Marchionne in October, when he said the company wanted to ditch its factories in Italy because they were so inefficient. | The controversy follows previous comments from Mr Marchionne in October, when he said the company wanted to ditch its factories in Italy because they were so inefficient. |
| He made the comments as he sought to impose tougher work conditions on unions at the firm's Mirafiori plant in Turin, in order to save it from closure. | He made the comments as he sought to impose tougher work conditions on unions at the firm's Mirafiori plant in Turin, in order to save it from closure. |