Fiat’s new tie-up with Chrysler (which sees it get a 35 percent stake in exchange for its platform and engine technology) is the second time in the last 10 years the Italian carmaker has headed for altar.
Back in March 2000 Fiat entered into a tie-up with General Motors. It was in pretty good health at the time, producing around 2.7m cars. But GM’s Opel/Vauxhall brand was not. Opel in particular was suffering in its home market, with neither the Corsa nor Vectra selling well.
In light of evidence that its European arm was fading fast, GM decided it would be good idea to tie-up with Fiat, combining forces on front-drive and engine technology, spreading costs and pain.So GM spent $2.5bn on a 20 percent share in Fiat Auto and, in exchange, Fiat SpA got 5.1 percent of GM’s shares.
However, some Italian bright spark decided to insert a ‘Put option’ into the deal, which meant Fiat could effectively force GM (from late 2003 onwards) to buy the remaining 80 percent of Fiat Auto shares. At the time, nobody paid much attention to this quirky clause.
In the end, the tie-up produced little, aside from the platform that underpins the current Corsa and Grand Punto. And Fiat borrowed the Vectra chassis to produce the Fiat Chroma. The engine tie-up was more of a success for GM, with Fiat providing much-needed quality diesel engines.
But by late 2004 Fiat was, itself, ailing. The Italians whipped out the contract and reminded GM that it could be forced to take Fiat Auto over. GM coughed politely and eventually – after some wriggling - wrote a cheque for $2bn, buying itself out of its commitment.
GM didn’t even end up benefiting from the excellent Saab-Alfa Premium platform project. The chassis went Alfa’s way and now lives under the 159. Eventually, Fiat’s windfall was used to help steer itself away from what was thought at the time to be near-certain bankruptcy.
So when Chrylser engineers are pouring over the three Fiat platforms they will be using for future models, they should spare a thought for cross-town rivals GM. You could say it was over £4.5bn of GM money that paid for much of that engineering.