Fiat, GM In Diesel Engine Joint Venture In Poland

Fiat, GM In Diesel Engine Joint Venture In Poland

Fiat and General Motors Corp. plan to jointly build a 300-million-euro ($285.2 million) diesel engine factory in Poland, Fiat said.

Construction of the factory in the southern Polish city of Bielsko-Biala will be launched after the car manufacturers establish two joint ventures as planned later this summer, Fiat added. One of the joint ventures will be responsible for development of motors and transmissions, and the other for parts, the company said.

Fiat said it expects the Bielsko-Biala factory to produce 460,000 small-capacity motors annually, with most intended for export.

The new facility will replace the factory that produces the mini class Fiat 126, due to be phased out of production this autumn, according to Fiat.

The engine factory, to employ 1,200 workers, will employ some of the workers laid off from the old facility, Fiat Poland spokesman Maciej Brzozowski said.

The Polish government has agreed to include the new factory in the Bielsko-Biala special economic zone, entitling it to an exemption from import duties for 10 years. From 2010 to 2016 the facility will be subject to half the normal import tariff, the company said.

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