By on February 6, 2011

Fiat CEO Sergio Marchionne stepped into a minefield by calling the high-interest bailout loans provided by the U.S. and Canadian governments in 2009 “shyster loans.” Some called him an ingrate, others branded him a racist. Yesterday, Marchionne apologized.

Deep in the Chrysler website, Marchionne issued a statement that sounds like it was written by a team of lawyers  and damage control experts:

“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.

“I have repeated on numerous occasions, on behalf of all the people at Chrysler, our gratitude to the U.S. and Canadian governments for the financial assistance that was critical to the recovery of our Group.

“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. This was done with the full support and understanding of the members of Chrysler Group LLC.

“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.”

Reaction so far remains muted. Detroit’s hometown papers, the Detroit News and the Detroit Free Press report the statement matter-of-factly. Commenters on the Freep website mostly heap invectives on the “ARROGANT PR%&K.” Many went beyond that and were forcibly removed.  No reaction from Germany, from where the scatological term allegedly originates.

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30 Comments on “Marchionne: Sh … I Didn’t Mean It...”


  • avatar
    DearS

    Denial will get you far.

  • avatar
    OldandSlow

    That photo looks like an Adobe Photoshop image.

  • avatar
    Detroit-X

    I’ll give him somewhat of a pass on that word; 11% is pretty steep, when it was the U.S. Government allowed Wall Street to go crazy, ruining Main Street, and created poor conditions for borrowing, leaving the US the only bank in town. (Not that a loan was the only cure Chrysler’s poor management and incompetence, of course.)

    Back when he turned around Fiat, the news stories said that he fired managers, not low-level workers, “because the managers were the ones to blame.”  How true, and how refreshing to hear from the CEO. I’ll always remember that. I admire his candidness.

    That said, I really don’t see why Chrysler was bailed out. There’s too much U.S. capacity, and they are the poorest performing of the Detroit 3. If GM and Ford absorbed the “good” models, it would probably only cause about 50% of the net unemployment effect of closing it down.

    • 0 avatar
      Educator(of teachers)Dan

      I haven’t read any of the books about the bailout, but I do intend to this summer when I’ve got more free time.  I know at least one of the books mentioned that Obama and his team briefly considered combining GM and Chrysler during the bankrupcy process.  Of course certain models would have had to die (likely Chrysler’s entire FWD lineup save the minivans) Jeep would have been the brand to survive… but what else would have happened? 

      Honestly I think that this combining would have been alright but I would have wanted Chrysler’s management and Marchionne to be in charge of the new company (given the YEARS of incompetence and basic incompetence of GMs culture) but I don’t see any politican having the guts to tell everyone in the Ren Cen to take a hike. 

    • 0 avatar
      HerrKaLeun

      11% is not high considering the risk the tax payer has (you saw their management and their products, right?). Chrysler was free to get a loan on the free market any time.
      If they think they now deserve lower interest rate, they are free to go to the free market and take a better loan to pay back our money.

    • 0 avatar
      th009

      @HerrKaLeun, exactly.

    • 0 avatar
      thebeelzebubtrigger

      “’ll give him somewhat of a pass on that word; 11% is pretty steep, when it was the U.S. Government allowed Wall Street to go crazy, ruining Main Street, and created poor conditions for borrowing, leaving the US the only bank in town. ”

      Exactly right. I applaud his candor, and think it’s a shame that we’ve become such a nation of yahoos that he has to apologize for basically “saying it like it is”. Stupid jingo culture…

    • 0 avatar
      Blue-S

      Marchionne has commented on other occasions to the effect that the way the Chrysler bailout deal was structured in comparison with how the GM bailout deal was structured – more high-interest loans for Chrysler but less govenmnent equity – has made it difficult for Chrysler to produce a net profit.  If the Federal government had taken a larger equity position in Chrysler and issued fewer loans (as the Feds did with GM), Chrysler would be showing a net profit. 

  • avatar
    motownr

    The way the Chrysler deal was structured makes it appear that the Feds were more convinced that they needed to prop up a major industry than confident in the prospects of Chrysler itself.
    Chrysler is far from out of the woods–they’re clearly more vulnerable to a spike in fuel costs than any other manufacturer.
    If gas makes a sharp move to $4/gal, what do they have to offer that’s competitive in the smaller end of the market?

  • avatar
    Mike999

    To be fair, some people don’t know “shyster” means jewish.
    You hear the term shyster in the context of a bad deal, or a rip-off, and that’s all you know.
    Then someone tells you it’s ethnic connotations, and it’s a surprise.
    But, his Press Secretary should have known.

    • 0 avatar
      MikeAR

      Sorry, look it up in your dictionary. It does not mean Jewish. It’s a German slang word for an unscrupulous lawyer, politician or someone of that type. You can be jewish, gentile or even Hindu and be a shyster by the technical definition. It does have anti-Semitic connotations because it has at times been appropriated by those are anti-Semitic but its use by someone without a history of anti-Semiticism shouldn’t be made into a big story.  

      I was entering this while Bertel was entering his much better post, sorry.

    • 0 avatar
      akitadog

      I always figured it meant an “ambulance-chaser” type of lawyer, as well. I’m aware of the implication of “unscrupulous Jews,” but I think this is one of those “chicken-or-egg” things.
      The term refers to lawyers. However, since the days of old Europe, European Jews were not allowed to own land, be farmers, or lead what would be standard lives for the general populace. So, they basically had to become “professionals,” i.e. lawyers, doctors, merchants, etc. I think the fact that Jews were in these professions in inordinate numbers is what helped bring about the anti-Semitic association.
      Now, the term “anti-Semitic” is a whole other argument in itself.

    • 0 avatar
      Some Guy

      Sergio should have said that he’s being gypped for paying so much interest.
      Oh wait… gypsies may take offense to that.

    • 0 avatar

      He knew (well, should have known) what he was getting into when he signed on the dotted line.
       
      Just like someone with buyer’s remorse a few weeks after agreeing to the sky-high interest rate on their new Durango — because they just HAD to have it! — Sergio has absolutely ZERO right to bitch.

      He deserves every brickbat thrown his way for his incessant whining, not for his choice of terms.

  • avatar
    zeus01

    To be fair, some people don’t know “shyster” means jewish.
    You hear the term shyster in the context of a bad deal, or a rip-off, and that’s all you know.
    Then someone tells you it’s ethnic connotations, and it’s a surprise.
    But, his Press Secretary should have known.
     
    I had no idea. Shyster is a term I frequently use to describe those who knowingly take advantage of the naive to rob them blind, telling themselves “there’s a sucker born every minute, and SOMEBODY’S gonna roll them anyway. May as well be me!”.
     
    I’m the opposite of anti-semite (though not Jewish myself). Painting all Jews (or all of any ethnic or religious group) with that brush is daft. Shyster is hereby dropped from my vocabulary. Sleazoids would be a more appropriate term for crooks.

    • 0 avatar

      shy·ster
      n. Slang
      An unethical, unscrupulous practitioner, especially of law.

      [Probably alteration of German Scheisser, son of a bitch, bastard, from scheissen, to defecate, from Middle High German schzen, from Old High German skzzan; see skei- in Indo-European roots.]

      Word History: Calling someone a shyster might be considered libellous; knowing its probable origin adds insult to injury. According to Gerald L. Cohen, a student of the word, shyster is derived from the German term scheisser, meaning literally “one who defecates,” from the verb scheissen, “to defecate,” with the English suffix -ster, “one who does,” substituted for the German suffix -er, meaning the same thing. Sheisser, which is chiefly a pejorative term, is the German equivalent of our English terms bastard and son of a bitch. Sheisser is generally thought to have been borrowed directly into English as the word shicer, which, among other things, is an Australian English term for an unproductive mine or claim, a sense that is also recorded for the word shyster.
      The American Heritage® Dictionary of the English Language, Fourth Edition copyright ©2000 by Houghton Mifflin Company. Updated in 2009. Published by Houghton Mifflin Company. All rights reserved
       
      According to this, it’s German.

    • 0 avatar
      psarhjinian

      I said this in another post: shyster is as much a racist slur as niggardly is.
       
      Both words sound like the might be racist, but have absolutely nothing to do with race whatsoever.

    • 0 avatar
      thebeelzebubtrigger

      Ah, now I see why people are angry. It’s because they’re semi-literate. :) I’m half Jewish, but somehow never heard the “shyster is a racial slur” myth before.

    • 0 avatar
      ClutchCarGo

      I think that some people confuse shyster with Shylock, the Jewish moneylender from Shakespeare’s The Merchant of Venice. I even suspect that Marchionne himself was mixing the 2 terms up a bit.

  • avatar
    pgcooldad

    What do you mean, “report the statement matter-of-factly.” ?

    It was referenced on the FIRST PAGE of the Free Press to the story on the front page of it’s business section.

  • avatar
    Lumbergh21

    My understanding of the meaning and origins of the word is much the same as what Bertel states. However, in fariness to any uneducated rabble rousers that might term it racist, I only guessed at the origins of the term after I started dating my German girlfriend (now wife) and hearing her use the German words, though never towards me of course.

  • avatar
    John Horner

    Would people have been happier if he had called the interest rate worthy of a loan shark?

    Considering that savings accounts right now pay a few tenths of a percent interest, 11% is pretty high. But then again, consumer credit rates for credit cards and the like are userous as well.
     

  • avatar
    Steven Lang

    This is an absolute non-event.
    My late father was German, and Jewish. He used the word shyster to describe a thief or a deceptive person. More times than not, it was used to describe a white collar person who stole money or acted in an unethical manner (Boesky, Milken, Helmsley, etc.)   Nearly every member of my family used ‘shyster’ including yours truly.
    I always assumed it was a Yiddish word that simply found it’s way into the English language.
    Sergio didn’t do a damned thing wrong. But like most folks, he has to apologize for the uneducated and hypersensitive elements of our society. What drek!
     
     

    • 0 avatar
      fincar1

      I’m surprised that it took this long in the thread for the Yiddish connection to come up. Particularly in show business for a long time there were so many guys that knew some Yiddish – ok, maybe quite a bit of Yiddish – that a good many Yiddish words became widely known. Shyster’s just one of them.
      There are far too many kvetches in this country today.

  • avatar
    LXbuilder

    I don’t care what anybody thinks, at 20% someone is a shyster in my books. That would be the Canadian or Ontario government.
    http://www.bloomberg.com/news/2010-12-06/chrysler-may-pay-back-loans-from-u-s-canada-before-2013-marchionne-says.html

  • avatar
    Zas

    I actually laughed at his original comment only because it sounded like he was just talking out his ass and not giving any forethought to what he was going to say.
    If anything, people should calm down and just realise that his comment is more out of frustration than calling American’s a crook (especially our government). Granted, some politicians are and that well may be deserved, but still, it’s tongue-in-cheekiness on his part.
    Now, if he called Obama a financial-terrorist in bed with the oil-hogging Saudi’s, maybe that would have been more eye-brow raising…but he didn’t… well, at least not yet ;)
    (going back to watching the BBCAmerica Top Gear Marathon)

  • avatar
    blowfish

    Marchionne issued a statement that sounds like it was written by a team of lawyers
    Sergio was a grad of osgoode hall Law school, arguably the best LS in Republik of canuckstan

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