The Financial Times reports that Fiat will next week threaten General Motors with legal action as the Italian industrial group asserts its right to compel the US manufacturer to buy its troubled car division.
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The report said that the Italian company will move to clear up the conflict with GM over whether its four-year-old “put” option, giving Fiat the right to sell its car arm, is valid.
People close to Fiat, which would not comment on Monday, said legal action would not necessarily mean the sale of Fiat Auto, but the establishment of the right to do so, the FT said.
GM has claimed repeatedly that the option can no longer be exercised.
The FT report added that it is important to Fiat to have the put option available in case the financial problems at Fiat Auto escalate further.
GM yesterday reiterated its position that the “put” can be contested because of restructuring at Fiat Auto and a capital injection.
Sergio Marchionne, Fiat chief executive, plans to tell Rick Wagoner, chairman and chief executive of GM, that the company will not accept another delay after the standstill agreement expires on Wednesday. The two are due to meet in Zurich on Tuesday next week.
