* Chrysler CEO: 'I want to pay back the shyster loans'
* Deal on low-interest DOE loans possible by March
* Says looking to revamp Fiat-Tata Motors partnership
* Opens possibility of Fiat-Chrysler merger in 2-3 years
(Adds detail on Fiat-Tata partnership, adds CEO comments
opening possibility of Fiat-Chrysler merger in 2-3 years)
By Deepa Seetharaman and Bernie Woodall
SAN FRANCISCO, Feb 4 Chrysler is working to
refinance what its chief executive characterized as "shyster
loans" that the Obama administration extended as part of a
bailout to keep the automaker from collapse in 2009.
"I want to pay back the shyster loans," Sergio Marchionne
said at an industry conference, using a derogatory term for an
unprincipled lawyer or politician. "Pay back the loans, get
those out and then take (the company) public."
Marchionne, who is also CEO of Italy's Fiat SpA FIA.MI
which owns 25 percent of Chrysler, has said repeatedly that the
high interest rates on $5.7 billion that Chrysler owes to the
U.S. Treasury have been an obstacle in the automaker's return
Marchionne used the term "shyster" at least three times
when discussing the interest rates on debt owed to the U.S.
Treasury during his nearly hour-long appearance at an industry
conference with auto dealers, journalists and analysts.
"When we did this deal back in 2009, we couldn't have
borrowed a buck from a 7-Eleven store. The banking system was
shut," Marchionne said of the bailout.
The sharp tone from an executive regarded as one of the
shrewdest dealmakers in the auto industry comes after delays in
Chrysler's application for a new round of low-interest loans
from the U.S. government.
Marchionne said Chrysler was in the final stages of
discussions with the Department of Energy on its application
for up to $3.5 billion loans. A deal in principle to access the
new loans was still possible by March, he said.
Chrysler applied for the Department of Energy loans in 2009
and executives had expected the funding by the end of 2010.
The Energy Department loans would allow Chrysler to borrow
at essentially the same rate as the federal government and
allow the automaker pay back higher-interest financing on the
$5.7 billion it owes the U.S. Treasury.
The bailout loans carry a premium. Chrysler pays 7.2
percent on one tranche of its Treasury loan worth more than $2
billion and 10.55 percent on another $3.5 billion.
At the height of the financial crisis, Obama administration
officials led by Steve Rattner and Ron Bloom debated whether
Chrysler was worth saving.
The company ultimately filed for a bankruptcy brokered by
the White House and was put under the management of Fiat in
exchange for its pledge to restructure the weakest of the U.S.
Marchionne said while it would be "technically" possible
for Chrysler to go public without refinancing its debt, that
option would be unwise.
Marchionne is credited with reviving Fiat, whose brands
include Ferrari, Maserati and Alfa Romeo.
Last year, Volkswagen AG (VOWG_p.DE) Chairman Ferdinand
Piech expressed an interest in buying Alfa Romeo. But Friday,
Marchionne flatly rejected any sale of Alfa Romeo to VW.
"As long as I'm the CEO of both Fiat and Chrysler, Mr.
Piech will never get an offer," Marchionne said during the J.D.
Marchionne also said Fiat is looking to "redimension" its
joint venture with Indian automaker Tata Motors (TAMO.BO) to
sell Fiat-branded cars in India.
Tata CEO Carl-Peter Forster was quoted as saying this week
that he is unhappy with sales under the partnership.
"Likewise," Marchionne said when asked about Forster's
comments by reporters. "That's why it's on the table and we're
going to discuss it."
Marchionne said in the next two to three years, Chrysler
and Fiat could ultimately merge to form a single company,
adding "for all I know it could be based here."
But there is a laundry list of things to do before a merger
of Fiat and Chrysler could happen, including the refinancing of
debt and the IPO, Marchionne said.
"I want to pay the shyster loans first," he added.
(Reporting by Deepa Seetharaman, editing by Matthew Lewis)