Fiat to Buy GM’s Stake in Polish Engine Plant

Fiat has some serious problems in Italy. After a disastrous 2009, when the Italian automaker posted important losses, CEO Sergio Marchionne decided that the only way he could turn the company around is by taking drastic measures. And drastic measures were taken, as the CEO decided to completely shut down Fiat’s Termini Imerese factory in Sicily and temporarily shut down all plants in Italy for two weeks.

Though the Italian government and the Fiat workers are pressuring Fiat to continue producing cars in Sicily and give up the idea of idling all the plants for two weeks, the automaker doesn’t seem to want to change its mind.

Despite all the tension in Italy, Fiat keeps on going. Recently, Fiat Powertrain Technologies (FPT) announced it signed a preliminary share transfer agreement with GM, regarding GM's 50 per cent share in FIAT-GM Powertrain Polska, an engine manufacturing joint venture in the special economic zone of Bielsko-Biala, Poland.

The new deal will not affect the manufacturing operations, as the plant will continue to build the 1.3 liter diesel engine, which will go on both Fiat and GM cars. The factory will continue to be managed by Fiat Powertrain Technologies.

The plant started to produce the 1.3 liter engine in 2003. The engine equips Fiat Group’s Panda, 500, Punto, Mito, Musa/Idea, Ypsilon, Doblo and GM’s Opel/Vauxhall Agila, Corsa, Meriva, Astra and Combo.

The sale is expected to be completed in the first quarter of 2010, after the parts will get the required antitrust approvals.