Divorce-Italian style

GENERAL Motors and Fiat have agreed to sever all aspects of their alliance forged in 2000, including cancellation of the put option that enabled the Fiat Group to force GM to purchase FiatAuto.

The settlement agreement signed on Sunday includes the unwinding of all joint-ventures – including Fiat-GM Powertrain – and GM returning its remaining 10 per cent equity interest in FiatAuto to the Fiat Group.

GM will continue to use some of Fiat’s diesel engine technology and will own a 50 per cent interest in the Bielsko-Biala (Poland) plant which manufacturers 1.3-litre diesel engines.

To end the relationship, GM also agreed to pay Fiat 1.55 billion euros ($US2 billion).