General Motors has not decided to change its now-diluted stake in Fiat’s Auto unit but is focused on squeezing more out of joint ventures, GM’s CEO said in comments published on Thursday, according to Reuters.
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The news agency noted that GM bought 20% of Fiat Auto in 2000 but its stake was diluted to 10% earlier this year when the US giant refused to put forward its share of a €5 billion euro ($US5.88 billion) recapitalisation of the loss-mired unit.
In an interview with Il Giornale newspaper, GM chief executive Richard Wagoner reportedly said: “There is no change in terms of our shareholding position in Fiat Auto.”
Reuters said Fiat has a “put” option that allows it to force GM to buy the rest of Fiat Auto from 2004, but after selling a raft of more profitable units to fund a turnaround, Fiat managers have often said they have no intention of getting rid of the car unit.
“That choice will allow us to focus more on developing the industrial alliance between our groups,” Wagoner was quoted as telling Il Giornale, Reuters said.
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By GlobalData“In a recent meeting with (Fiat) CEO Giuseppe Morchio we decided to give another, bigger push to our industrial and technical co-operation,” he reportedly added.
Reuters noted that Fiat and GM have two joint ventures in developing powertrains and buying parts together, which should save them €1 billion euros — money much needed at GM’s loss-making European division as well as at Fiat.
