Fiat faces future on its own after securing $2 billion from GM
Monday, February 14th 2005, 10:20 am
By: News On 6
ROME (AP) _ Fiat will go it alone now that General Motors is buying its way out of a deal to purchase the bulk of the struggling Italian automaker.
The U-S auto giant will shell out $2-billion to dissolve a partnership that included an option that could have forced GM to buy the 90% of Fiat Auto that it does not already own.
A Fiat executive says the money will be used to shore up the company's finances. But analysts are raising doubts about how much the cash from GM could help.
The price paid by GM may be worth it as analysts say the Detroit-based company will not be forced to take over Fiat Auto's extra capacity or its $10-billion in debt.
GM will return its ten percent stake in Fiat's auto division and the two carmakers will dismantle their joint venture that manufactures engines and transmissions.