GM Pays Fiat $2 Billion to End Alliance

General Motors(GM Quote) agreed Sunday to pay Fiat (FIA Quote) $2 billion, or 1.55 billion euros, to settle a long-running contract dispute between the two automakers. The payment prevents GM from having to purchase Fiat's loss-generating Fiat Auto unit.

MarketWatch reports that the boards of both companies have approved the deal, for which Detroit, Mich.-based GM will take an after-tax charge of $840 million, or $1.49 a share.

With the settlement, GM and Fiat dissolve a five-year partnership, begun when GM purchased 20% of Fiat Auto. Fiat will continue to supply diesel engines to GM, but the companies will dissolve their two joint ventures in powertrains and purchasing. ...