SAN FRANCISCO (Reuters) - Chrysler Group LLC’s chief executive apologized on Saturday for describing the high-interest bailout loans extended by the U.S. and Canadian governments in 2009 as “shyster loans.”
“Yesterday, in responding to a question about Chrysler’s government loans, I used a term in reference to the interest rate being charged on our government loans that has raised concern,” CEO Sergio Marchionne said in a statement. “I regret the remark which I consider inappropriate.”
Shyster is a derogatory term used to describe an unprincipled lawyer or politician. He used the term at least three times in his remarks during an industry conference on Friday.
In 2010, Chrysler paid $1.23 billion, or about $3.4 million a day, in interest payments on its debt. It is seeking to refinance those loans before a planned initial public offering in the second half of 2011.
In his statement, Marchionne said the company was grateful for the financial assistance from the U.S. and Canadian governments at a time when the company had no other options. The loans were part of a bailout to keep the automaker from collapse.
Chrysler emerged from bankruptcy in June 2009 and is now under the management control of Italy’s Fiat SpA, which has a 25 percent stake in the U.S. automaker. Marchionne is also CEO of Fiat.
“As the only parties willing to underwrite the risk associated with Chrysler’s recovery plan, the two governments levied interest rates that, although appropriate at the time, are above current market conditions,” Marchionne said.
“Because of these changed market conditions as well as the improvements in our performance and outlook made possible through the support of the U.S. and Canadian governments, Chrysler intends to repay these loans in full at the earliest opportunity,” he added.
Reporting by Deepa Seetharaman; Editing by Peter Cooney
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