PARIS – Officials from General Motors Corp. are downplaying their meeting here this week with Fiat Auto SpA regarding the Italian auto maker’s money-losing operations.

“We meet with them on a regular basis,” GM Chief Financial Officer John Devine tells Ward’s at the Paris auto show. “So typically, at an auto show we do get together (to) look at how (our joint venture is) going and what we want to do differently. And we did that this time as well.”

GM acquired 20% of Fiat Auto in 2000 for $2.4 billion. Corporate parent Fiat SpA took a 5.1% stake in GM. The alliance established joint ventures and cooperative product development efforts that have helped both auto makers cut costs in the profit-tough European market.

However, the equity swap also included a provision that would allow Fiat SpA to force GM to purchase the remaining 80% stake of Fiat Auto between 2004 and 2009.

GM Chief Financial Officer John Devine.

Fiat Auto has been struggling financially since 2002 due to plummeting sales, raising speculation the corporate parent will utilize the put option sooner than later.

GM, with its European operations losing money and skyrocketing legacy costs in North America, currently does not want to complete ownership of Fiat Auto.

The companies agreed in October 2003 to delay the put-option until between Jan. 24, 2005, and July 24, 2010. But it appears unlikely Fiat will utilize the put option near-term given Fiat Auto’s current rock-bottom market value.

GM’s payment today for the remaining stake of Fiat Auto would be dirt-cheap compared with the Italian auto maker’s value four years ago.

GM’s stake was diluted to 10% last year when Fiat decided to re-capitalize the auto making arm to the tune of €5 billion ($6 billion), an action GM claims invalidates the put option.

GM’s stake will be diluted further – to 4.5% – following a planned E5 billion capital increase by Fiat Auto. Devine says GM will not participate.

The companies reportedly will not delay the put option for a second time. GM previously has indicated it might challenge the put option’s authenticity in court.

“I can’t talk about the put,” Devine says. “There’s nothing I can say about it. I’m not going to speculate about hypotheticals. It’s a tough business. We have plenty to do at (GM’s German unit Adam) Opel (AG), and fixing our business (in Europe). We hope Fiat is addressing their issues as well.”

GM Chairman and CEO Rick Wagoner says the auto maker is prepared if Fiat enacts the put option.

“I don’t know what they are going to do,” Wagoner says. “We do have a good idea of what our strategy is going to be. But we haven’t talked about it publicly, with the exception of our stock-exchange filings.”