GM May Invest US$2 Billion to Get Out of Put Option
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| Fiat's latest co-CEO Alessandro Barberis joined Chairman Paolo Fresco in meeting with top GM execs last weekend. (Photo: Fiat Auto) |
According to Reuters, Fiat and General Motors executives met this past weekend in New York to discuss a "last-ditch effort" to save the Fiat's automotive brand from an uncertain future.
The companies reportedly held the meeting to negotiate Fiat's put option, a contractual agreement that forces GM to buy the remaining 80% stake in the beleaguered Italian automaker in 2004.
Fiat Chairman Paolo Fresco and CEO Alessandro Barberis are said to have met with top-level GM executives for more than five hours discussing the put option, among other related topics.
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| Fiat's project 350, or B-MPV, will make its debut at the Geneva Auto Show. The compact minivan based on the Punto platform will rival GM's new Opel Meriva. (Photo: Fiat Auto) |
Rumor has it that Fiat is offering to release GM from the put if it contributes more than US$2 billion to the Italian company's restructuring, but so far nothing concrete validates the talk.
Smart money says that GM would rather not invest good money, that it could better use developing its own domestic and European market brands, after bad. It would also only take care of part of Fiat's problem. It is said to need more than US$5 billion to bring its far from profitable car division back to life.
That said supporting Fiat now with a smaller amount might be a lot more cost effective than having to pour much more into fully purchasing the automaker in 2004.