Chief executive of carmakers Fiat and Chrysler, Sergio Marchionne, is facing wrath from Italy and the US for his comments on shifting Fiat's headquarters, and describing the interest rates charged on American bailout loans as "shyster".
At a conference in San Francisco on 4 February, Marchionne (pictured) suggested that a possible merger of Fiat and Chrysler over the next two to three years would shift the company headquarters from Turin in Italy to Detroit in the US. This raised concern for Italy's economy where Fiat is the largest private sector employer and has had its headquarters since the company's founding in 1899.
Following his comments, Fiat clarified that no decision had been made about a shift of the company headquarters, and said that it planned to maintain regional offices in Turin and Detroit. These remarks from Marchionne came just a few weeks after Fiat had assured union workers that it had no immediate plans to merge with Chrysler and will stay put in Turin.
Marchionne also said that the bailout loans given by the American government for Chrysler were at "shyster rates", implying that the interest rates were extremely high.
In a statement a day later, Marchionne apologised for using the word "shyster". He said: "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. I regret the remark which I consider inappropriate."
He also added that the high interest rate had been appropriate as no one else had been ready to bail out Chrysler during the credit crisis. Latest reports suggest that Marchionne is to meet Italian prime minister Silvio Berlusconi and a few other members of the Italian government on Saturday to clarify his comments.
Family-controlled Fiat was founded by Giovanni Agnelli, and is currently headed by his grandson John Elkann, with non-family Marchionne as the chief executive.
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