Plant safe after GM's reverse
GM's dramatic U-turn over a deal to buy Fiat has strengthened the future of the Italian's diesel plant in southern Poland.
The two automotive giants revealed that they had hammered out a deal, which would see GM pay $2 (zł.6.1) billion and Fiat give up its rights to force the Detroit giant to buy its car business.
The agreement sees some continued cooperation in a number of fields. Central to this is the acquisition by General Motors of a 50 percent interest from Fiat of a new joint venture in manufacturing powertrains, in Bielsko-Biała, in southern Poland, that currently produces 1.3-liter SDE diesel engines.
"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," said GM chairman and CEO Rick Wagoner.
The initial takeover transaction was drawn up in 2000 but had recently begun looming over both concerns. GM, which will return its 10 percent stake in Fiat, would have been obliged to take over debts of around E8 (zł.32) billion if Fiat had enforced the 2000 deal.
The withdrawal also underlines GM's failures this side of the Atlantic, where losses are estimated to have run up to $7 (zł.21.5) billion over the past five years, according to reports. GM is planning to shed more than 10,000 jobs in Europe by 2006.
The two automotive giants revealed that they had hammered out a deal, which would see GM pay $2 (zł.6.1) billion and Fiat give up its rights to force the Detroit giant to buy its car business.
The agreement sees some continued cooperation in a number of fields. Central to this is the acquisition by General Motors of a 50 percent interest from Fiat of a new joint venture in manufacturing powertrains, in Bielsko-Biała, in southern Poland, that currently produces 1.3-liter SDE diesel engines.
"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," said GM chairman and CEO Rick Wagoner.
The initial takeover transaction was drawn up in 2000 but had recently begun looming over both concerns. GM, which will return its 10 percent stake in Fiat, would have been obliged to take over debts of around E8 (zł.32) billion if Fiat had enforced the 2000 deal.
The withdrawal also underlines GM's failures this side of the Atlantic, where losses are estimated to have run up to $7 (zł.21.5) billion over the past five years, according to reports. GM is planning to shed more than 10,000 jobs in Europe by 2006.
