Two weeks ago it seemed doubtful that General Motors would do a deal for Opel with Magna. Today, though, GM announced its support for the sale of a 55-percent stake in Opel (and British Vauxhall) to the Magna-Sberbank consortium.
Magna is the big Canadian parts supplier leading a Russian consortium that includes the state-owned bank, Sberbank, and the Russian automaker GAZ. In the deal, Magna and Sberbank will each get a 27.5-percent stake in Opel, while Opel employees will hold 10 percent, with GM keeping a 35-percent stake.
German Chancellor Angela Merkel expressed her approval over the deal. She's facing an election, and the Opel sale is a big political issue in Germany. Of the two bidders, Magna-Sberbank and the Belgian investment firm, RHJ International, the Germans preferred Magna, which is thought to be more amenable to preserving German manufacturing jobs (half of all Opel employees are based in Germany). The fact that Merkel promised government financial backing for a Magna-Sberbank deal is very likely what tipped this in the Russians' favor.
Under this deal, 10,000 jobs will be cut, but only a quarter will be in Germany. This has of course elevated concern among Vauxhall employees in the UK, which is Opel's second-largest country of operation.
All along, GM is thought to have preferred RHJ, which made a simpler bid. In addition, GM officials have expressed concern over the flow of intellectual property and product development responsibilities to Russia, which is apparently on the other side of the earth from Detroit.
GM will still be involved in product development under the Magna/Sberbank deal, though, as the Opel Insignia (Vauxhall version pictured) and Astra will continue to provide the basis for GM cars sold in the U.S.
Financial Times (sub.req)
firstwagon says:
09:21 AM, 09/10/09
Interesting. I wonder if we'll get some Opels here in Canada now that there is a (partially) Canadian owned car company.
coolb944 says:
02:45 PM, 09/10/09
That car in the picture is the Vaxhaull Insignia VXR, no? Not an Opel.
eriches says:
03:30 PM, 09/10/09
@coolb944: Correct. I'll run an edit on that. Thanks. -Erin Riches
activ8 says:
09:43 AM, 09/11/09
I thought the deal was off because GM didn't want patents and technology shared for years with Magna?
g8gtnorth says:
02:19 PM, 09/11/09
My understanding was keeping access to said technology from the Russians.
Magna, being Magna, probablty already has access to much of the R&D for the opels. They also have a proven ability to compartmentalize their processes in a way that protects OEM technology from their competitors. This is while retaining the ability to develop parts, manufacture parts and assemble entire vehicles for a range of manufacturers.
What Magna has achieved is pretty incredible. The concern, I feel, is that as an OEM if Magna begins to undercut sales of rival vehicles that they themselves have a hand in manufacturing, they're effectively shooting themselves in the foot. Then again, Frank has proven he knows what he's doing. Only time will tell.