GM to buy Fiat
Thread Starter
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Joined: Feb 2002
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GM to buy Fiat
http://www.detnews.com/2005/autosins.../25/-68494.htm
hey remember that post i made about the Competizione, whos knows, maybe it was a lucky guess.
hey remember that post i made about the Competizione, whos knows, maybe it was a lucky guess.
Thread Starter
Registered User
Joined: Feb 2002
Posts: 2,428
Re: GM to buy Fiat
Originally Posted by AronZ28
How did GM get into this situation? I know they signed some sort of contract to buy Fiat, but why did they do it?
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Joined: Jan 2002
Posts: 599
From: Inland Empire, CA
Re: GM to buy Fiat
I remember someone posting about this a month or two back and someone talking like he was crazy and that it wasn't happening. Looks like a pretty bad situation for GM all around.
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Joined: Sep 1999
Posts: 1,873
From: South Jersey
Re: GM to buy Fiat
This has got to be the single dumbest business decision ever made, well at least in the last decade. It's a Lose-lose-lose situation for GM. Why would they ever have entered into such an agreement? It defies logic.
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Joined: Dec 2003
Posts: 2,315
From: NY...what a bad place for a nice car
Re: GM to buy Fiat
are they just trying to boost overseas sales, (same reason y they changed teh corvette to reflect eurpean cars)
if so i think they need to worrry about their home turf first
if so i think they need to worrry about their home turf first
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Joined: Nov 2000
Posts: 2,712
From: Ontario
Re: GM to buy Fiat
Ferrari is part of the overall Fiat Corp, not Fiat auto, so it doesn't come with the deal.
The "put" option was part of the deal made 4 years ago when GM bought 20% of Fiat in exchange for 5% of GM. At the time, Fiat was doing relatively well, especially with their small Diesels, something GM lacked. There were also gains to be had in combining their purchasing. It wasn't until sometime after the deal that Fiat started to go down the crapper.
Certainly the put option was huge mistake, no matter how good of shape GM might have thought Fiat was at the time. However GM is on sound footing when they say the option's no longer valid because Fiat Auto has made major changes to their corporate structure since the deal was struck.
At this point, Fiat is just trying to extort some money from GM to make the whole thing go away easily. Fiat knows it will just be tied up in court for years and they'd probably lose in the end.
The "put" option was part of the deal made 4 years ago when GM bought 20% of Fiat in exchange for 5% of GM. At the time, Fiat was doing relatively well, especially with their small Diesels, something GM lacked. There were also gains to be had in combining their purchasing. It wasn't until sometime after the deal that Fiat started to go down the crapper.
Certainly the put option was huge mistake, no matter how good of shape GM might have thought Fiat was at the time. However GM is on sound footing when they say the option's no longer valid because Fiat Auto has made major changes to their corporate structure since the deal was struck.
At this point, Fiat is just trying to extort some money from GM to make the whole thing go away easily. Fiat knows it will just be tied up in court for years and they'd probably lose in the end.
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Joined: Jun 2001
Posts: 4,600
From: Pewee Valley, KY
Re: GM to buy Fiat
Originally Posted by R377
Ferrari is part of the overall Fiat Corp, not Fiat auto, so it doesn't come with the deal.
The "put" option was part of the deal made 4 years ago when GM bought 20% of Fiat in exchange for 5% of GM. At the time, Fiat was doing relatively well, especially with their small Diesels, something GM lacked. There were also gains to be had in combining their purchasing. It wasn't until sometime after the deal that Fiat started to go down the crapper.
Certainly the put option was huge mistake, no matter how good of shape GM might have thought Fiat was at the time. However GM is on sound footing when they say the option's no longer valid because Fiat Auto has made major changes to their corporate structure since the deal was struck.
At this point, Fiat is just trying to extort some money from GM to make the whole thing go away easily. Fiat knows it will just be tied up in court for years and they'd probably lose in the end.
The "put" option was part of the deal made 4 years ago when GM bought 20% of Fiat in exchange for 5% of GM. At the time, Fiat was doing relatively well, especially with their small Diesels, something GM lacked. There were also gains to be had in combining their purchasing. It wasn't until sometime after the deal that Fiat started to go down the crapper.
Certainly the put option was huge mistake, no matter how good of shape GM might have thought Fiat was at the time. However GM is on sound footing when they say the option's no longer valid because Fiat Auto has made major changes to their corporate structure since the deal was struck.
At this point, Fiat is just trying to extort some money from GM to make the whole thing go away easily. Fiat knows it will just be tied up in court for years and they'd probably lose in the end.
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Joined: Apr 2000
Posts: 3,748
From: New England
Re: GM to buy Fiat
Originally Posted by 95GRNZ
First Daewoo, then Fiat... :blah: Can't wait to see what's next... 
TS
TS
95GRNZ, thats what Im thinking..... and I think it is going to hit home...
http://web.camaross.com/forums/showthread.php?t=335717
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Joined: Dec 1999
Posts: 2,779
From: Denton, TX
Re: GM to buy Fiat
Originally Posted by Caps94ZODG
95GRNZ, thats what Im thinking..... and I think it is going to hit home...
http://web.camaross.com/forums/showthread.php?t=335717
http://web.camaross.com/forums/showthread.php?t=335717
I was thinking more to the tunes of GM buying, say..., Kia or some other stupid brand.
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Joined: Nov 2000
Posts: 16,176
From: Chicagoland IL
Re: GM to buy Fiat
Like R377 mentioned, this is simply an attempt at extortion by Fiat. But what a mess. And what a completely stupid agreement.
Here's some numbers:
-Fiat wants $1B in cash to make the "put" option go away.
-GM traded $2.4B in GM stock, (5% of GM stock) in exchange for 20% of Fiat in 2000.
-Some analysts believe, that Fiat Auto has zero equity, (ie., worth nothing), but who ever takes it over will also assume $10B in debt.
-If Fiat and GM were getting along, they would save $1B annually, starting in a year or two...on jointly developed projects.
Somewhere in those numbers, smart people from GM should be able to salvage something.
I say, call their bluff.
Here's some numbers:
-Fiat wants $1B in cash to make the "put" option go away.
-GM traded $2.4B in GM stock, (5% of GM stock) in exchange for 20% of Fiat in 2000.
-Some analysts believe, that Fiat Auto has zero equity, (ie., worth nothing), but who ever takes it over will also assume $10B in debt.
-If Fiat and GM were getting along, they would save $1B annually, starting in a year or two...on jointly developed projects.
Somewhere in those numbers, smart people from GM should be able to salvage something.
I say, call their bluff.