A week after the 'mediation' period between GM and Fiat came to a close, sources report that the two sides are 'still talking'.

"Just because the mediation has ended, it doesn't mean there are no talks anymore," a reputedly well placed source told Reuters yesterday.

The controversial 'put' option that could force General Motors to buy Fiat's Auto Division completed its designated 'mediation' period last Tuesday night. Face to face talks between Fiat's CEO, Sergio Machionne, and his GM counterpart, Rick Wagoner, during the 30-day period, failed to settle the issue and the next stage to be triggered is taking the matter to a New York-based tribunal which will resolve validity.

Fiat regard the 'put' option as being a valuable 'asset' to the Italian industrial conglomerate and they want its value and validity resolved once and for all, after what has been a long period of uncertainty.

For their part GM cite the partial sale of Fidis, Fiat Auto's financial arm, together with the recent recapitalisation programme which they opted not to take part in, and which resulted in their stake being diluted to 10 percent, as rendering the option invalid.

Last Wednesday Fiat issued a statement reserving the right to exercise the 'put' option at a time of their own choosing, but the fact that they haven't yet gone down this route, and that GM have remained surprisingly quiet on the whole issue, suggests that the two parties are still talking.

Fiat's CFO meets the creditor banks

Fiat's Chief Financial Officer Luigi Gubitosi met the company's main creditor banks last Friday, Reuters has also reported this week, although ostensibly this was said to be to keep them up to speed on Fiat's future strategy, rather than to discuss the 'put' option, and the on-going dispute with GM.

Reuters also believe that the banks, which gave Fiat a 3 billion euro loan in 2002 to tide them over, can convert this into an equity stake from September.

Marchionne to meet with Italian Government Ministers this week

This week will see a round of top level meetings between Fiat senior management and key domestic politicians, as the Italian government continues to get drawn into the carmaker's future.

Sergio Marchionne is to meet Labour Minister Roberto Maroni in Rome today, while informed sources believe he will then swiftly meet Industry Minister Antonio Marzano, possibly as early as tomorrow, to brief him on the dispute with GM. The Italian government has repeatedly distanced itself from any talk of state intervention in Fiat, citing EU legislation as preventing this route from being available today.

At the weekend Maroni commented, "The government is watching the situation carefully but without getting involved in questions of financial intervention. As far as we're concerned there's no possibility whatsoever for public intervention in Fiat's capital, that would be to step back more than fifty years,"

Production resumes at Termini Imerese

The workforce of the threatened Termini Imerese plant in Sicily returned to the production lines on Monday morning after their latest two week redundancy period finished.

The Palermo plant, which builds the Fiat Punto, and is facing an uncertain future, has been working two weeks on and two weeks off ever since December. The 1,400 workers will be put on the government redundancy fund once more when the plant shuts down again from 21st February to 6th March.