Fiat: We Dont Want To Sell To GM

ROME March 7, 2003; AP reported that Fiat SpA chairman Umberto Agnelli says he hopes never to use an option to sell his company's auto unit to General Motors Corp., and wants instead to pursue cooperation with the Detroit automaker.

In 2000, Fiat struck a deal with GM, selling 20 percent of its auto operations with a put option to sell the remaining share starting 2004. In recent years, Fiat's shares have dropped precipitously amid falling sales and massive debt, leading to pressure on the company to sell.

"As for the put option, it is a contractual right that we have never thought of exercising in the short term and that, in fact, we hope never to exercise," Agnelli said in an interview from the Geneva auto show published Friday in Rome's La Repubblica newspaper.

Top Fiat executives met Thursday at the auto show with GM officials, including chief executive Rick Wagoner.

Agnelli, the head of the family that founded and controls Fiat, became chairman last Friday a month after the death of his older brother and longtime family patriarch, Giovanni.

Agnelli said in the interview that he wanted to persuade GM to help in the recapitalization of the struggling Turin-based automaker.

"The participation of GM in the recapitalization depends, since it is also difficult for them in the United States as it is for everyone everywhere. I hope to be able to convince them, even if I'm not sure about it," Agnelli said.

"Between us and our allies at General Motors, what counts most at this point is a real industrial collaboration, an even closer partnership, which is in the interest of both companies," he said. "All the other issues are important but not priorities."

Fiat SpA last week reported a consolidated net loss of 4.3 billion euros ($4.6 billion) in 2002, citing one-time charges mainly for the restructuring of its troubled auto unit.

The group suffered another disappointment Wednesday when Standard & Poor's Ratings Services assigned junk status to its long-term corporate credit rating — the third major rating agencies to do so.