Detroit, Aug 09: General Motors Corp said on Friday it was planning talks with Fiat SpA over the status of its agreement with the troubled Fiat Auto unit.
In its quarterly report to the US Securities and Exchange Commission, GM said it and Fiat "have discussed potential alternatives to the Master Agreement, and further discussions regarding the status of the Master Agreement are planned."


Fiat sold GM 20 per cent of Fiat Auto in 2000 and won a "put" option giving Fiat the right to force GM to buy the rest from 2004. Since then, Fiat Auto has suffered huge losses, sought more investments from its bankers and launched a series of restructuring plans.


While some Fiat investors have seen the put as an emergency lifeline for the company, GM has said recently, and repeated again in its filing Friday, that the Fiat put could be "unenforceable by reason of actions Fiat has taken or may take."



GM spokeswoman Toni Simonetti said she could not elaborate on the statement in the filing.



"We have ongoing dialogue with Fiat," she said. "It's to be expected that more discussions will be held."

Fiat's leaders have said they believe the put is valid, but that it was only a last resort. A Fiat spokesman said: "We are constantly talking to GM and developing our alliance."


GM also said Fiat had told it that because it did not take part in Fiat's capital injections into Fiat Auto, its stake had fallen to 10 per cent.

The two companies have joint ventures to build engines and buy parts, and earlier this year GM allowed Fiat to sell cars in Mexico through GM's dealer network.


GM's shares closed up 27 cents at $36.98 in trading Friday on the New York Stock Exchange.
Bureau Report