Here is some trackback of Fiat and General Motors relationship.
13 March 2000, in Torino, General Motors and Fiat announced the creation of their strategic industrial alliance, this is an important partnership in two of the largest automobile markets in the world: Europe and Latin America. The synergies identified by the two companies was speculated to bring annual benefit of 1.2 billion dollars beginning in the third year. As well projected to grow a 2 billion dollars annually beginning in the fifth year when the common components will be utilized optimally. The key point in that alliance was that GM and Fiat will remain independent and same competitors in auto market. GM acquired 20 percent of Fiat Auto in exchange for shares in GM.
Some comments from company officials that time was as :
GM is progressively developing a strategy aimed at growing our automobile activity on the global level. The chance to create an alliance with a great, technologically-advanced company like Fiat, through a valid financial mechanism, helps us reinforce our position in Europe and South America: a strategic objective for GM. This alliance gives us several significant advantages both in the common areas of utilisation of platforms and components as well as in cost reductions, thus providing a more competitive base for our brands in order to create value for customers and shareholders.
John F. Smith Jr.
Chairman and Chief Executive Officer General Motors
A year ago, we indicated a clear objective for the Fiat Group: to reach positions of leadership and excellence in all our activities. We are proud to have closed this agreement that makes Fiat Auto, our main sector of activity, capable of reaching this objective: excellence in costs based on the extraordinary synergies enabled by this industrial alliance and the possibility of access to the research and development activities of our partner (the world leader in the automobile industry) in order to face the growing technological challenges of the new century.
Paolo Fresco
Chairman Fiat S.p.A.
As the consolidation of this industry continues, beginning a partnership with Fiat, a company that integrates completely with the strengths of General Motors, is a powerful strategic move for us - GM and Fiat will bring together their strengths and each will continue to move autonomously and expand according to their capabilities. G. Richard Wagoner Jr.
Chief Operating Officer and President General Motors
We are enthusiastic about the opportunity to work with our colleagues in GM in this truly unique industrial collaboration project. Thanks to this agreement, Fiat Auto will be able to tackle key areas in cost reduction, utilising our common strength in Europe and Latin American, gaining opportunities that will allow us both to exploit the growing trends in developing markets. Through structural projects, this will allow us to accelerate even more our return to profitability, already well underway. Once more, we are demonstrating our leadership in the capability to change the business of the automobile industry, allowing Fiat Auto to focus its activities on customer service with a leaner organization.
Paolo Cantarella
Chief Executive Officer, Fiat S.p.A. .
Its now GM doesn’t have pressing business at home. Stocks has gone down to 50 percent since 2000, CEO Richard Wagoner Jr. is abroad on a mission to aavoid buying the 90 percent of Fiat that GM doesn’t already own.
Fiat and GM said a mediation process to sort out the dispute over the put option would end on Feb. 1 2005 and Fiat said it would hold off on pulling the trigger until Feb. 2 at the earliest. The pause suggested the two companies would hammer out a deal and avoid a lengthy, costly court case, analysts said. Fiat has always regarded the put option “an important tool for Fiat”, which is valid and available “according to the established terms”.
So, Now it’s the time to see what happen next.