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.
Reuters
Financial Times (sub.req)
Categories: Auto Industry,General Motors,Manufacturers,Opel