Fiat chairman Umberto Agnelli says he hopes never to use an option to sell his company’s car unit to General Motors and wants instead to pursue cooperation with Detroit, Associated Press (AP) reported.
AP noted that, in 2000, Fiat struck a deal with GM, selling 20% of its auto operations with a put option to sell the remaining share starting in 2004. In recent years, Fiat’s shares have dropped precipitously amid falling sales and massive debt, leading to pressure on the company to sell.
“As for the put option, it is a contractual right that we have never thought of exercising in the short term and that, in fact, we hope never to exercise,” AP cited Agnelli as saying in an interview from the Geneva motor show published in Rome’s La Repubblica newspaper.
Top Fiat executives met at the auto show with GM officials, including chief executive Rick Wagoner, AP noted, adding that Agnelli, the head of the family that founded and controls Fiat, became chairman last Friday a month after the death of his older brother and longtime family patriarch, Giovanni.
According to AP, Agnelli said in the interview that he wanted to persuade GM to help in the recapitalisation of the struggling Turin-based car maker.
“The participation of GM in the recapitalisation depends, since it is also difficult for them in the United States as it is for everyone everywhere. I hope to be able to convince them, even if I’m not sure about it,” Agnelli reportedly said, according to AP.
“Between us and our allies at General Motors, what counts most at this point is a real industrial collaboration, an even closer partnership, which is in the interest of both companies,” he reportedly said, AP reported. “All the other issues are important but not priorities.”
AP noted that Fiat SPA last week reported a consolidated net loss of 4.3 billion euros ($US4.6 billion) in 2002, citing one-time charges mainly for the restructuring of its troubled car unit while the group suffered another disappointment Wednesday when Standard & Poor’s Ratings Services assigned junk status to its long-term corporate credit rating — the third major rating agency to do so.
According to AP, Agnelli said such ratings come and go. “We hope that the collaboration with GM allows us to get back,” he said.
AP added that, also on Friday, Fiat announced a new team to promote the company’s image, led by Lodovico Passerin d’Entreves, who has been a spokesman for the Agnelli family holding companies.