A permanent magnet (PM) machine has a reconfigurable fault condition mechanism disposed solely within a stator core portion, wherein the mechanism is automatically reconfigurable to reduce fault currents associated with the PM machine during a fault condition. The reconfigurable fault condition mechanism is automatically reconfigurable to also reduce internal heat associated with the PM machine during a fault condition. A method of reconfiguring the fault condition mechanism upon detection of a fault condition includes the steps of 1) selecting the reconfigurable fault condition mechanism from a) a plurality of rotatable magnetically anisotropic cylinders disposed within stator core slots, b) a plurality of ferrofluid-fillable cavities associated with stator core slots, and c) a sliding shield within the stator core; and 2) reconfiguring the fault condition mechanism to automatically reduce fault currents associated with the PM machine upon detection of a fault condition.