Since the initial deal, GM and Fiat have created joint ventures for purchasing and powertrain development. They also have begun work on joint luxury car and subcompact car platforms.
But GM's aggressive pursuit of current savings makes analysts question the benefits in buying the rest of Fiat, particularly in light of Fiat's loss of $395 million in the first quarter and $506 million in 2001.
For comparison, GM posted net income of $601 million in 2001. As it stands now, Fiat's losses could wipe out most of GM's profits.
"When they announced the deal two years ago, they said they would get 80 percent of the benefits from owning 20 percent of the company, which raises the question of why they need to buy the remaining 80 percent," said Michael Bruynesteyn, automotive analyst for Prudential Securities in New York.
A GM spokesman said the company will not comment on speculation that GM would attempt to close the deal soon. The automaker stands by a statement by CEO Rick Wagoner to the Wall Street Journal last week that GM is not in buyout talks with Fiat.
CFO John Devine has said that GM is "war-gaming" the Fiat situation, which the GM spokesman said refers to in-depth internal study of different scenarios. Devine also has said that GM could afford the purchase without jeopardizing its operations.
GM could pay for Fiat Auto with cash, stock or a combination of the two.
The spokesman noted that the $2.4 billion GM paid in the initial deal, which included the cost of setting up the GM-Fiat joint ventures, bears no relation to what GM might pay for the remaining 80 percent of Fiat Auto. Merrill Lynch's Casesa said the market capitalization for Fiat S.p.A., the parent company of Fiat Auto, was about $7.6 billion last week.
Scott Sprinzen, managing director for credit-rating agency Standard & Poor's in New York, said management distraction could be a significant problem. GM already is occupied with restructuring Opel.