GM, Fiat Settle with GM Retaining Diesel Rights

13 February 2005

GM and Fiat announced the termination of their current tangled relationship, ending a period of uncertainty as GM tried to avoid an interpretation of their agreement that would have forced GM to buy the unprofitable auomaker, a unit of Italy’s largest manufacturer.

The companies are ending two joint ventures formed in 2000. GM will pay Fiat $2 billion, surrender its 10% stake, and acquire diesel engine assets it needs for the future.

Among the elements of the agreement:

• GM will co-own with Fiat key powertrain intellectual property, including the SDE and JTD diesel engines and the M20-32 six-speed manual transmission;

• GM will acquire a 50% interest in a new joint venture limited to operating the powertrain manufacturing plant in Bielsko-Biala, Poland, that currently produces the 1.3 liter SDE diesel engine.