MILAN -- Fiat has denied it is in talks about striking a major new alliance with other carmakers after a newspaper said its strained partnership with General Motors was about to crumble.
"Fiat and General Motors have an industrial and financial alliance, and there are no similar talks going on with other automakers," Fiat said in a statement on Friday.
Earlier, newspaper la Repubblica said Fiat wanted to pursue new joint ventures, particularly with PSA Peugeot Citroen, which already makes vans with Fiat.
GM owns 10 percent of Fiat Auto and they have joint ventures in powertrains and purchasing, but their relationship has been tense due to differences over a "put" option that Fiat can use to force GM to buy the rest of Fiat Auto from January 2005. GM also denied that the U.S. carmaker had plans to walk away from Fiat. "There is nothing new," a spokesman said. "Nothing has changed."
A Peugeot spokesman said the French group had no plans for any equity alliance with Fiat and said the light commercial vehicles joint venture would continue.
"We have worked in cooperation with Fiat for a long time. The arrangement has worked extremely well and will continue," the spokesman said.
Top Fiat executives have long said the carmaker could strike new industrial joint ventures to cut more costs as it battles to pull back into profit after slumping to a record loss in 2002.
Chief Executive Sergio Marchionne has suggested that such a plan was being held back by Fiat's ties to GM.
The automakers have acknowledged that their engine and car parts assembly joint venture suffered from excess capacity and in September announced plans to temporarily lay off 700 workers.
ABSENCE OF ALTERNATIVES
The two European rivals have had contrasting fortunes in recent years. Peugeot's sales surged as it benefited from heavy investment in new models, while Fiat has struggled with an ageing line-up and the flop of the mid-sized Stilo.
Peugeot shares are up 20 percent over the past year, while Fiat's have lost 10 percent.
A Milan equity trader said a break-up of the GM alliance would be bad news for Fiat shares, especially in the absence of real alternatives for the company.
"The put option is worth less all the time in my opinion, but it still does have some value," another trader said. "If the put vanished entirely, the market would not be happy about it."
La Repubblica said Marchionne would start discussing a "divorce" with GM executives when they hold a regular meeting to discuss their joint ventures on Dec. 14.
The meeting falls the day before the expiration of an agreement between GM and Fiat under which both sides refrained from legal action over the put option for a year and pushed the option's start date back by 12 months to January 2005.
The report in la Repubblica, which quoted no sources, said Fiat could develop better synergies with Peugeot than with GM and did not rule out other possible alliances.
"This is a reporter's reading of the situation which has no link to reality," Fiat's statement said.