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Fiat CEO Sergio Marchionne reportedly will meet key Italian ministers this week as the country’s largest industrial group continues to wrangle with General Motors over an option to sell its ailing car arm.
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According to Reuters, labour minister Roberto Maroni said he would meet Marchionne in Rome on Tuesday and an industry ministry source said a meeting would probably be held there on Wednesday so Marchionne can update minister Antonio Marzano on his row with GM.
Reuters noted that Fiat has long been battling with GM over a put option that allows the bus-to-publishing group to sell its 90% stake in loss-making Fiat Auto to GM, which owns the rest – a mediation period to settle the spat ended with no result last week, dashing hopes that GM would pay Fiat about $US2.3 billion to cancel the put.
Some financial sources told the news agency the two were still in talks but others said they expected GM to take Fiat to court soon, to argue the put was voided by a recapitalisation of Fiat Auto which halved GM’s stake to 10% and by the sale of the car unit’s finance arm.
The tussle over the put has created a cloud of uncertainty in Italy, and unions have threatened to strike in March, Reuters said.
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By GlobalDataAccording to the news agency, media reports have suggested that if the put option were annulled, Fiat could consider spinning Fiat Auto out of the rest of the group and invite other investors, including the government, to buy into the car maker.
“As far as we’re concerned there’s no possibility whatsoever for public intervention in Fiat’s capital. That would be to step back 50 years,” Maroni, who has quipped that Fiat has been given enough state money through the years to buy GM, reportedly said at the weekend.
Reuters noted that the government would likely oppose the sale of Fiat Auto to GM as it would raise the spectre of plant closures and more job cuts at the country’s largest private employer.
