It's going to cost GM $1.5 billion to lose Fiat
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From: Ontario
It's going to cost GM $1.5 billion to lose Fiat
Good lord, I can't believe it's going to cost them that much.
http://www.forbes.com/feeds/ap/2005/...ap1822782.html
edit: make that $2 billion. Ah, what's another $500 mil?
http://www.forbes.com/feeds/ap/2005/...ap1822789.html
Shoulda just bought it, let it declare bancruptcy, and let the pieces go to the highest bidder. This was nothing more than corporate blackmail.
http://www.forbes.com/feeds/ap/2005/...ap1822782.html
edit: make that $2 billion. Ah, what's another $500 mil?
http://www.forbes.com/feeds/ap/2005/...ap1822789.html
Shoulda just bought it, let it declare bancruptcy, and let the pieces go to the highest bidder. This was nothing more than corporate blackmail.
Last edited by R377; Feb 13, 2005 at 01:00 PM.
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Posts: 1,496
From: Roseville, MI, USA
Re: It's going to cost GM $1.5 billion to lose Fiat
Originally Posted by number77
why isn't their stock affected?
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Joined: Mar 2003
Posts: 609
From: Cornelius, NC
Re: It's going to cost GM $1.5 billion to lose Fiat
Originally Posted by R377
Shoulda just bought it, let it declare bancruptcy, and let the pieces go to the highest bidder. This was nothing more than corporate blackmail.
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Joined: Sep 1999
Posts: 1,873
From: South Jersey
Re: It's going to cost GM $1.5 billion to lose Fiat
2 billion? They could have purchased 7 Daewoo's for that.... 
This has got to be one of the dumbest business deals ever. Can anyone explain why they signed the original fiat deal in the first place?
This has got to be one of the dumbest business deals ever. Can anyone explain why they signed the original fiat deal in the first place?
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Joined: Jul 2004
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From: Roseville, MI, USA
Re: It's going to cost GM $1.5 billion to lose Fiat
GMEurope needed diesels, Fiat produces good diesels. That, and DCX wanted them, and GM stepped in and curbed that deal. What a favor they did to DCX.
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Re: It's going to cost GM $1.5 billion to lose Fiat
Originally Posted by Josh452
GMEurope needed diesels, Fiat produces good diesels. That, and DCX wanted them, and GM stepped in and curbed that deal. What a favor they did to DCX.
Has any automotive merger/buyout in the last 20 years been successful enough to warrant the cost? GM buying Saab? No. GM buying Isuzu? No. Ford buying Jag, Aston, Volvo, or Land Rover? Doubt it. DCX's 'merger of equals'? No. Maybe GM's purchase of Daewoo has a chance, but only after their price was cut to 10% of the original Ford offer. Automotive CEOs must be the worst history students on the planet.
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Joined: Jun 2000
Posts: 2,801
From: South Bend , IN
Re: It's going to cost GM $1.5 billion to lose Fiat
Originally Posted by R377
Of course DCX has their own demons, what with Mitsubishi and all.
Has any automotive merger/buyout in the last 20 years been successful enough to warrant the cost? GM buying Saab? No. GM buying Isuzu? No. Ford buying Jag, Aston, Volvo, or Land Rover? Doubt it. DCX's 'merger of equals'? No. Maybe GM's purchase of Daewoo has a chance, but only after their price was cut to 10% of the original Ford offer. Automotive CEOs must be the worst history students on the planet.
Has any automotive merger/buyout in the last 20 years been successful enough to warrant the cost? GM buying Saab? No. GM buying Isuzu? No. Ford buying Jag, Aston, Volvo, or Land Rover? Doubt it. DCX's 'merger of equals'? No. Maybe GM's purchase of Daewoo has a chance, but only after their price was cut to 10% of the original Ford offer. Automotive CEOs must be the worst history students on the planet.
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Joined: Jan 2004
Posts: 929
Re: It's going to cost GM $1.5 billion to lose Fiat
Originally Posted by 90 Z28SS
Isnt the Duramax engine a product of the Isuzu merger . That would been worth it right there as the old 6.5 was not exactly a fine piece and could not complete with powerstroke or cummins .
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Joined: Nov 2000
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From: Chicagoland IL
Re: It's going to cost GM $1.5 billion to lose Fiat
Here's the official GM release:
FOR RELEASE: 2005-02-13
CONTACTS
GM, Fiat Reach Settlement Agreement
Master Agreement Is Terminated
GM Preserves Diesel Engine Capability
Joint Cost Savings Expected to Continue
DETROIT - General Motors Corp (NYSE: GM) and Fiat S.p.A. (NYSE: FIA) today announced they have executed an agreement to terminate the Master Agreement between the companies and realign their industrial relationships. The boards of directors of both GM and Fiat have approved the settlement agreement.
GM will acquire certain strategic assets from Fiat to assure the future availability of a full range of diesel engines for vehicles produced by GM's global operations.
"GM and Fiat have agreed that it is in the best interest of their companies and shareholders to terminate the Master Agreement," said GM Chairman and Chief Executive Officer Rick Wagoner. "GM has derived significant benefits from its association with Fiat Auto, including the accelerated development of diesel engines, cost savings and the joint development of certain vehicle programs. With this settlement, our overall financial returns will have been favorable.
"We believe that we have reached a fair and equitable agreement that enables both companies to maintain a high level of synergy savings, but in a more focused approach that gives each of us more freedom to act in today's competitive environment," Wagoner said.
Under terms of the agreement, GM will pay Fiat €1.55 billion to terminate the Master Agreement (including the put option) and to acquire an interest in key strategic diesel engine assets, and other important rights with respect to diesel engine technology and know-how. GM will return its 10 percent equity interest in Fiat Auto Holdings to Fiat S.p.A.
The most significant elements of the settlement agreement are as follows:
The Fiat-GM Powertrain (FGP) joint-venture company will be dissolved and GM will regain complete ownership of all GM assets originally contributed. During a transition period, FGP will continue to supply both companies so that their respective operations will not be disrupted;
GM will co-own with Fiat key powertrain intellectual property, including the SDE and JTD diesel engines and the M20-32 six-speed manual transmission;
GM will acquire a 50 percent interest in a new joint venture limited to operating the powertrain manufacturing plant in Bielsko-Biala, Poland, that currently produces the 1.3 liter SDE diesel engine;
The GM-Fiat Worldwide Purchasing joint venture will be dissolved.
The companies will continue to generate joint cost savings in several key areas, including:
Long-term agreements to supply each other with powertrains;
Continued cooperative development of certain vehicle programs;
Through Fiat's participation in GM's purchasing alliance program.
GM will take an after-tax charge to earnings of approximately US$840 million, or $1.49 per fully diluted share.
CONTACTS
GM, Fiat Reach Settlement Agreement
Master Agreement Is Terminated
GM Preserves Diesel Engine Capability
Joint Cost Savings Expected to Continue
DETROIT - General Motors Corp (NYSE: GM) and Fiat S.p.A. (NYSE: FIA) today announced they have executed an agreement to terminate the Master Agreement between the companies and realign their industrial relationships. The boards of directors of both GM and Fiat have approved the settlement agreement.
GM will acquire certain strategic assets from Fiat to assure the future availability of a full range of diesel engines for vehicles produced by GM's global operations.
"GM and Fiat have agreed that it is in the best interest of their companies and shareholders to terminate the Master Agreement," said GM Chairman and Chief Executive Officer Rick Wagoner. "GM has derived significant benefits from its association with Fiat Auto, including the accelerated development of diesel engines, cost savings and the joint development of certain vehicle programs. With this settlement, our overall financial returns will have been favorable.
"We believe that we have reached a fair and equitable agreement that enables both companies to maintain a high level of synergy savings, but in a more focused approach that gives each of us more freedom to act in today's competitive environment," Wagoner said.
Under terms of the agreement, GM will pay Fiat €1.55 billion to terminate the Master Agreement (including the put option) and to acquire an interest in key strategic diesel engine assets, and other important rights with respect to diesel engine technology and know-how. GM will return its 10 percent equity interest in Fiat Auto Holdings to Fiat S.p.A.
The most significant elements of the settlement agreement are as follows:
The Fiat-GM Powertrain (FGP) joint-venture company will be dissolved and GM will regain complete ownership of all GM assets originally contributed. During a transition period, FGP will continue to supply both companies so that their respective operations will not be disrupted;
GM will co-own with Fiat key powertrain intellectual property, including the SDE and JTD diesel engines and the M20-32 six-speed manual transmission;
GM will acquire a 50 percent interest in a new joint venture limited to operating the powertrain manufacturing plant in Bielsko-Biala, Poland, that currently produces the 1.3 liter SDE diesel engine;
The GM-Fiat Worldwide Purchasing joint venture will be dissolved.
The companies will continue to generate joint cost savings in several key areas, including:
Long-term agreements to supply each other with powertrains;
Continued cooperative development of certain vehicle programs;
Through Fiat's participation in GM's purchasing alliance program.
GM will take an after-tax charge to earnings of approximately US$840 million, or $1.49 per fully diluted share.
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Joined: Aug 2002
Posts: 3,650
From: Indianapolis, IN
Re: It's going to cost GM $1.5 billion to lose Fiat
I read the press release too, and it says there will be an after-tax hit of $840 million, not $2 billion. Still a lot of dough, but not 2 billion bad. Is there more than that hidden somewhere? 
Disciple
Joined: Nov 2000
Posts: 1,479
Re: It's going to cost GM $1.5 billion to lose Fiat
Originally Posted by Z284ever
Anyone know what happens to the GM stock that Fiat recieved in the stock swap?
Dec. 21, 2002: Fiat says it has sold its 5 percent stake in GM for $1.16 billion.
Last edited by poSSum; Feb 15, 2005 at 12:30 PM.
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Posts: 13,713
From: The Golden State
Re: It's going to cost GM $1.5 billion to lose Fiat
Don't forget that GM had $2 billion worth of investment in Fiat, that was worth just $200 million in 2004, and GM finally wrote off that amount last year. 
That's on top of whatever they are giving Fiat to settle.
That's on top of whatever they are giving Fiat to settle.
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Joined: Aug 2004
Posts: 1,870
Re: It's going to cost GM $1.5 billion to lose Fiat
GM...errr...Fiat announced today that they will aquires Maserati from Ferrari.
http://www.theautochannel.com/F/news...utomotive.html
I'm sure GM funded a good portion of this new Fiat aquisition
.
http://www.theautochannel.com/F/news...utomotive.html
I'm sure GM funded a good portion of this new Fiat aquisition
.
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