TURIN - Fiat Auto and General Motors will create two 50-50 joint ventures by mid-summer to combine their purchasing and powertrain activities in Europe and Latin America.
Tommaso Le Pera, Fiat's current head of purchasing, will be named CEO of the purchasing joint venture, sources say. The chairman is expected to come from GM.
GM will name the CEO of the powertrain joint venture, while Fiat Auto will install Wolfgang Hatz, a former BMW Motorsport engineer, as chairman.
Fiat Auto initially planned to give the position to Bruno Cena, who in March was appointed the company's engine chief. But Cena resigned in mid-April to become general manager of Italian specialist car designer and manufacturer Carrozzeria Bertone (see Page 22).
Fiat and GM announced plans on March 13 to buy a share of each other's carmaking operations. The deal is expected to be finalized in late June or July.
About 300 Fiat Auto and GM European and Latin American managers have been assigned to joint projects between the two companies.
Fiat Group Managing Director Paolo Cantarella said Fiat will concentrate on turbodiesels and GM's Opel unit on gasoline engines, but that the existing plants will continue to build a combined total of 5 million engines a year.
He denied speculation among union representatives in Germany that the consolidation of engines and gearboxes will lead to layoffs in Opel plants.
Sources say that Fiat will receive not only V-6 and eventually V-8 gasoline engines from GM, but probably also Opel's 1.4-liter, 16-valve Ecotec engine to replace Fiat's 1.4-liter, 12-valve unit launched with the Bravo and Brava in 1994 and discontinued two years ago.
In addition, the 1.0-liter, 3-cylinder, 12-valve from the Agila and Corsa models could be used in the Fiat Seicento to replace the 900cc, 4-cylinder, 8-valve that was originally launched in 1955 with the Fiat 600.
Meanwhile, the compact sport-utility Fiat is developing will not use Mitsubishi's Pajero Pinin four-wheel-drive system. Talks between Fiat and Mitsubishi Motors were already at a standstill over costs. DaimlerChrysler's acquisition of a major stake in Mitsubishi Motors last month ended the talks for good.
Fiat Auto might now take the same mechanical components from one of GM's Japanese affiliates - Isuzu, Subaru or Suzuki.
The leading candidate is Suzuki. The new Fiat compact SUV is midway in size between Suzuki's Vitara and Grand Vitara. Fiat still hopes that the change of technical partner won't delay the compact SUV too much. It was originally expected in the summer of 2001, but the launch could be postponed until spring 2002.
For tax reasons, Fiat SpA will not sell the 20 percent stake in Fiat Auto to GM directly. The stake will be taken in a specially-created sub-holding to be established in the Netherlands. GM is paying $2.4 billion for the stake. In turn, Fiat is acquiring about 5 percent of GM.
To be called Fiat Auto NV, the new company will have 100 percent control of Fiat Auto SpA, currently owned by Fiat SpA.
Fiat Auto NV will be the third sub-holding created by Fiat Group in the Netherlands, after Iveco NV and New Holland NV.