Just as everyone else was packing up for Christmas, the directors of the Fiat Group were meeting in Turin, 'officially' to review the 2005 budget and co-opt Pasquale Pistorio onto the board.

The meeting, which took place on 23rd December, was only scheduled earlier in the month. While reviewing the 2005 budget was given as the official reason for the board members getting together, there was no doubt that discussing the controversial 'put' option, and the upcoming strategy of Fiat towards resolving the issue with GM, would have been at the top of the agenda.

The meeting of the Fiat Group director's came just one week after Fiat's CEO Sergio Marchionne, met secretly with his GM counterpart Rick Wagoner, in Friedrichshafen, a quiet town on the Swiss-German border, well away from pent-up media attention that had swirled around their get together.

The much-hyped meeting eventually broke up without any resolution having being reached, and a first stage of the mediation process has now be triggered, with the pair scheduled to meet again before mid-January.

GM are reported to have offered Fiat a sum of US$500 million to buy their way out of the 'put' option, and to have it cancelled, while Marchionne is believed to be holding out for a much larger sum of around US$3 billion. With such variation in the two company's valuations an intense period of negotiation is to be expected.

After the special board meeting, Fiat issued the following statement: "The Board of Directors of Fiat S.p.A. met today in Turin under the chairmanship of Luca Cordero di Montezemolo. The meeting focused on the review of the Group preliminary budget data for 2005. Group consolidated data for the fourth quarter and full 2004 will be examined on the occasion of the next Board meeting, scheduled for February 28, 2005.

"In addition, the Board resolved to start reorganization of shareholdings and activities within the Group in order to focus on the role of Fiat S.p.A. as the exclusive and direct shareholder of operating Sectors and financial activities.

"At the same time, FIAT Partecipazioni S.p.A. shall take on the role of principal sub-holding of the Group, with portfolio interests and activities not belonging to the operating Sectors.

"Upon proposal by the Chairman, Mr. Pasquale Pistorio has been co-opted to the Board. Mr. Pistorio satisfies the independence requirements envisaged by the Corporate Governance Code for Italian Listed Companies.

"Pistorio has also become a member of the Nominating and Compensation Committee, in replacement of Hermann Josef Lamberti, who has been elected to fill the vacancy on the Internal Control Committee."

Pasquale Pistorio

Pistorio was born at Agira near Enna (Sicily) in 1936, and graduated in Electrical Engineering from the Polytechnic of Turin. He began his career as a salesman for Motorola products first in Turin and then in Milan. In 1967 he joined Motorola and became Director of Marketing in Europe.

Pasquale Pistorio started a rapid career at the American semiconductor company, where he was first appointed Manager for worldwide marketing operations in Phoenix, Arizona, and then Vice President of the Motorola Corporation. Finally, he became General Manager of the International Semiconductor Division of Motorola responsible for design, manufacturing and marketing activities for all regions outside of the United States.
 

In July 1980 he returned to Italy to become President and Chief Executive Officer of the SGS Group, an Italian microelectronics company that merged under the guidance of Pasquale Pistorio with the French semiconductor company Thomson Semiconducteurs.

In May 1987, SGS-THOMSON Microelectronics was founded. Pistorio headed this new company as President and Chief Executive Officer and brought the company among the leading semiconductor manufacturers worldwide.

STMicroelectronics is one of the world's largest semiconductor companies. In 2003, ST's net revenues were US$7.24 billion and net earnings were US$253 million. For the first half of 2004, ST's net revenue's were US$4.2 billion and net earnings were US$225 million.

Mr. Pistorio is a member of the Board of Directors of MEDEA+, the European advanced technology research program and, as of December 2003, of the ANIE Federation.

As a firm believer in corporate social responsibility and a member of the ICT Task Force created by the United Nations to bridge the digital divide, Pasquale Pistorio contributed to the development of proposals to attract corporate attention and commitment in this new worldwide challenge. Pasquale Pistorio was awarded the title of “Commendatore al Merito” of the Italian Republic, “Chevalier de l'Ordre National du Mérite” by the President of the French Republic, "Cavaliere del Lavoro” by the President of the Italian Republic, and “Chevalier de la Légion d’Honneur” of the French Republic. In addition, he received honorary degrees from the Universities of Genoa, Malta, Pavia, Catania, Palermo and recently from the University of Sannio, Benevento.

He is Vice President of Confindustria for innovation and research and a member of the “Conseil Stratégique pour l'attractivité du pays auprès du Premier Ministre français".

He is a member of the Internal Advisory Council of the Government of Singapore; of the ICT Task Force of the United Nations; of the International Business Council of the World Economic Forum; of the World Business Council for Sustainable Development; of the French ″Conseil Stratégique des Technologies de l’Information″; of the Conseil Consultatif of Banque de France and of the Italian Institute of Technology (IIT).

He is a member of the European Round Table of Industrialists (ERT). He is also Chairman of ENIAC, the technological platform for nanoelectronics of the European Union.

Fiat Partecipazioni and the AEDES Group reach 'call' option agreement

Meanwhile on Wednesday, Fiat Partecipazioni and the AEDES Group, announced they had reached an agreement under which the former will exercise a call option on the Centro Congressi of Lingotto in Turin and the Centro Direzionale e Centro Tecnico in Arese (Milan) for a price of 140 million euros.

Fiat Partecipazioni will pay Aedes 6.5 million euros in cash and the remaining sum will be paid by canceling out 133.5 million euros owed to Fiat by the Aedes Group.