GM and Fiat terminate partnership

GM and Fiat terminate partnership

A dispute stemming from the master agreement between General Motors Corp and Fiat S.p.A ended with both parties signing a settlement agreement. GM officials wanted to cancel the master agreement because they yearned for more freedom in the market. Fiat on the other hand did not want to dissolve the agreement, giving rise to the dispute. With the settlement agreement, GM will pay Fiat €1.55 billion to terminate the master agreement. GM will also acquire the interest in diesel engine assets and other important rights with respect to diesel engine technology and know-how. In return, GM will hand over its 10% equity interest in Fiat Auto Holdings to Fiat S.p.A. The settlement also brings to an end the Fiat-GM Powertrain (FGP) joint venture; however, they will still hold the intellectual property of powertrain, SDE and JTD diesel engines, and M20-32 six-speed manual transmission cooperatively. The companies will continue to act together in long-term agreements to supply each other with powertrains. They will also continue cooperative development of certain vehicle programs. The industrial partnership of the companies lasted for five years.