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February 16, 2005
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This Week:

• Dodge will expand in Europe and other important markets beginning in 2006

• The 2006 Infiniti M - Designed to Outperform

• 2005 Ford Mustang Drops Its Top At AAI - Receives CAR & DRIVER "10BEST" Award

• All-new Saab 9-3 SportCombi: Power and versatility, Saab style

• Porsche Defines the 'Safety Must Haves' When Shopping for an SUV

• World premiere of the new B-Class at the Geneva Motor Show - a Mercedes-Benz in new dimensions

• BMW Driver Training: Adventure Trainings And Adventure Trips 2005

• GM, Fiat Reach Settlement Agreement

• Citroën C6 - Motoring Chic

• Honda Civic Si Concept Makes World Debut at Chicago Auto Show

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GM, Fiat Reach Settlement Agreement

• Master Agreement Is Terminated

• GM Preserves Diesel Engine Capability

• Joint Cost Savings Expected to Continue

"GM and Fiat have agreed that it is in the best interest of their companies and shareholders to terminate the Master Agreement," said GM Chairman and Chief Executive Officer Rick Wagoner. "GM has derived significant benefits from its association with Fiat Auto, including the accelerated development of diesel engines, cost savings and the joint development of certain vehicle programs. With this settlement, our overall financial returns will have been favorable.

"We believe that we have reached a fair and equitable agreement that enables both companies to maintain a high level of synergy savings, but in a more focused approach that gives each of us more freedom to act in today's competitive environment," Wagoner said.

Under terms of the agreement, GM will pay Fiat €1.55 billion to terminate the Master Agreement (including the put option) and to acquire an interest in key strategic diesel engine assets, and other important rights with respect to diesel engine technology and know-how. GM will return its 10 percent equity interest in Fiat Auto Holdings to Fiat S.p.A.

The most significant elements of the settlement agreement are as follows:

The Fiat-GM Powertrain (FGP) joint-venture company will be dissolved and GM will regain complete ownership of all GM assets originally contributed. During a transition period, FGP will continue to supply both companies so that their respective operations will not be disrupted; GM will co-own with Fiat key powertrain intellectual property, including the SDE and JTD diesel engines and the M20-32 six-speed manual transmission; GM will acquire a 50 percent interest in a new joint venture limited to operating the powertrain manufacturing plant in Bielsko-Biala, Poland, that currently produces the 1.3 liter SDE diesel engine; The GM-Fiat Worldwide Purchasing joint venture will be dissolved.

The companies will continue to generate joint cost savings in several key areas, including:

• Long-term agreements to supply each other with powertrains;

• Continued cooperative development of certain vehicle programs;

• Through Fiat's participation in GM's purchasing alliance program.

• GM will take an after-tax charge to earnings of approximately US$840 million, or $1.49 per fully diluted share.

(Feb 13,  2005)