GM will have to pay Fiat $2 billion. Alfa Romeo will now work with Maserati instead of Ferrari.
March 1, 2005
- wardsauto.com
The price of a corporate divorce can be steep, as General Motors Corp. now can attest.
GM agreed last month to pay $2 billion to its ailing Italian alliance partner, Fiat Auto SpA, to nullify a pesky clause in their original pact that would have forced GM to purchase by 2010 the 90% stake in Fiat Auto it did not already own.
The clause and the entire pact now is dead. After months of saber rattling, GM will pay Fiat a direct cash payment of $1.3 billion immediately.
The remaining $700 million will be delivered as the two auto makers finalize the process of shutting down joint ventures formed in the original pact, signed in March 2000, when GM paid $2.4 billion for a 20% stake in Fiat Auto.
GM also will return its 10% equity holding in Fiat Auto, which will be transferred to corporate parent Fiat SpA.
Along with the cash payment, GM and Fiat agree to dissolve their GM-Fiat Powertrain JV, which was one of the few bright spots in the alliance. The joint venture gave GM access to Fiat's small diesel engine technology, which it desperately needed for the European market, while Fiat gained access to improved gasoline engine technology.
Each auto maker will regain control of the assets each contributed to the powertrain JV, while engines will be supplied to both auto makers without interruption.
Separately, the Italian auto maker says it will transfer full ownership of Maserati SpA under Fiat Auto “as soon as practicable.”
The announcement was followed by a series of management changes, including the ouster of Fait Auto CEO Herbert Demel, who was replaced by Fiat SpA CEO Sergio Marchionne, who negotiated the settlement with GM.
The newly installed chief also gave walking papers to Maserati CEO Martin Leach and moved Ferrari SpA chief designer Frank Stephenson to run the Fiat, Lancia and commercial vehicle styling center.
(end of article)
Detroit free press:
Fiat is putting together a Maserati station wagon
June 23, 2005
BY MATHIAS WILDT
BLOOMBERG
Fiat SpA plans to introduce a Maserati station wagon using an Alfa Romeo design and parts as the automaker increases cooperation among its sports-car brands.
"Maserati and Alfa Romeo will share platforms, components and sales networks," said Fiat Chairman Luca Cordero di Montezemolo in a briefing for journalists in Maranello, Italy, on Wednesday. Fiat owns 56% of Ferrari, which controls Maserati.
Fiat is counting on new models and a reorganization of its brands to turn around the unprofitable car business controlled by the Agnelli family. The company hired Karl Kalbfell from BMW AG in January to run Alfa Romeo and Maserati. The new car will be a sporty crossover wagon.
Fiat will take over the running of Maserati from Ferrari. Maserati and Alfa Romeo will work together on technology, marketing and sales, including selling Alfa Romeos in the United States, Montezemolo said. Maserati and Ferrari sell cars in the United States.
"This will lift Alfa Romeo's market positioning," he said.
In 1997, Ferrari acquired Maserati, which was founded 91 years ago in Modena, Italy. It provided Ferrari engine and body technology in a bid to revive the brand.
Maserati, which built 700 cars in 1997, sold 4,600 vehicles in 2004, including the $90,000 Quattroporte, which is driven by singers Bono and Jose Carreras. Maserati is targeting sales of 10,000 vehicles a year by 2007.
Alfa Romeo's 2004 sales in western Europe, its main market, declined 3.7% to 153,516 units, according to the European carmakers association. In the five months through May, European sales fell 19% to 50,142 vehicles.
The brand aims to boost sales with two new models being introduced this year: the Alfa Romeo 159 sedan and the Brera coupe.
Alfa Romeo began making cars in 1910. The company is known for its racing team and gave Enzo Ferrari, the founder of Ferrari, his start as a driver. Fiat bought Alfa Romeo in 1986.
Montezemolo also said that there are no plans to spin off the automotive business of Fiat and no plans for an initial public offering of shares in Ferrari.
Here is the Maserati Kubang GT Wagon. It was shown at the 2003 Detroit auto show.
Here is a link to the 2003 Alfa Romeo Kamal Concept
2003 Alfa Romeo Kamal Concept