TURIN - The alliance between General Motors and Fiat began as a series of exploratory discussions on how to share investments and costs in emerging markets.
But the talks picked up momentum and importance in February and March of 1999, when the two began discussing the possibility of setting up a common purchasing organization for Europe and Latin America.
At that point, the meetings began to involve senior executives from both companies: GM President Rick Wagoner and Fiat SpA Chairman Paolo Fresco and/or CEO Paolo Cantarella.
As talks proceeded, the areas of possible cooperation moved from joint purchasing to a single company to run the respective powertrain operations and the creation of common platforms.
Several times, Fiat executives say, honorary chairman Giovanni Agnelli attended meetings to discuss his hopes and goals for an alliance.
In parallel, Fiat was considering an offer from Ford Motor Co. to acquire some or all of Fiat Auto. Those talks peaked in June 1999, sources say.
Fiat also was considering a more concrete offer from Daimler-Chrysler for a complete takeover of Fiat Auto. Insiders say Daimler-Chrysler proposed to swap between 11 and 12 percent of its shares for 100 percent of Fiat Auto.
At prevailing prices for DCX stock, the offer valued Fiat Auto at about $7.5 billion. In contrast, the GM-Fiat deal signed March 13, values Fiat Auto at slightly more than $12 billion.
As talks between Wagoner, Fresco and Cantarella continued through the autumn, the realization grew that a wider alliance involving equity was justified. The final round of negotiations began in mid-January, culminating in concluding talks in Detroit at the beginning of the second week of March.
On Friday, March 10, GM delivered its final and formal offer to Fiat Auto headquarters in Turin.
The next day Wagoner arrived in Milan, where he began talks with Fresco and Cantarella that lasted until 3am Sunday. The Italian government was officially informed early Sunday, and GM Chairman Jack Smith arrived in Milan early Sunday afternoon.
Fiat Group directors, meeting in extraordinary session at 3pm Monday, March 13, approved GM's offer unanimously. The formal announcement was made at a press conference in Turin at 5.30pm the same day.