Opel and Vauxhall fall to Magna, Russia
BY IAN PORTER | 1st Jun 2009
Crucially, GM has retained 35 per cent, which will likely allow a continuation of technology and platform sharing. This will be an important support for GM’s other small-car operation, Daewoo, which will be supplying much of GM’s needs in the US small-car market.
Potentially, this is good news for Australia's GM Holden, whose small-car range - including the newly released Cruze and a planned locally-made small car to go into production next year - are based on European-designed platforms.
Ten per cent of the new-look GM Europe will be held by Opel’s 50,000 workers across Europe.
Sberbank will also bring an association with the GAZ group, a large industrial company that builds commercial vehicles in Russia and which will partner Magna and Opel in the Russian market.
The deal was struck at 2am Friday as the German government and four state governments hurried the discussions so that the Opel deal could be done before a June 1 deadline, which is likely to see GM apply for a Chapter 11 bankruptcy.
The German deal will cocoon Opel against any problems caused by the probable bankruptcy of GM today. All parties have agreed to appoint a trustee to take charge of Opel and all its operations in the short term, while the final details of the Magna deal are ironed out.
Under the deal, the German Government will advance €1.5 billion ($A2.65 billion) in bridging loans to keep Opel solvent while all parties finalise the deal.
Apart from the companies involved, four German state parliaments also need to approve the deal, although their chief ministers all supported the deal after the meeting, as did representatives of the US treasury.
The co-chief executive of Magna, Siegfried Wolf, said it could take as long as five weeks to complete the negotiations.
It appears GM preferred the Magna deal because it is based heavily on making a strong push into the emerging Russian market, which has the best prospects of any European market.
Magna plans for Opel and GM to gain 20 per cent of the Russian market in the short term, before expanding this to one million units including light commercial vehicles such as the Opel Combo.
GM Europe head Carl-Peter Forster told reporters: "I think this is the start of a new future for Opel, for the workers, the company and the brand.” He added, however, there would still be some hard negotiations on the fine-print ahead.
Magna has 70,000 employees in 25 countries, supplies components and systems to many of the world's leading car-makers, including fuel tanks and radiator grilles for the Mercedes-Benz C-class and fuel filters for the BMW X3.
Based in Ruesselsheim, near Frankfurt, Opel employs 25,000 staff in four German plants.
It is part of a GM Europe operation that employs more than 50,000, with car manufacturing plants in Spain, Poland, Belgium and Britain, where Opel cars are sold under the Vauxhall brand, as well as engine and parts sites such as Aspern, near Vienna.
German unions are happy about Magna beating Fiat to the prize as they feared as many as 18,000 workers might be shown the door under Sergio Marchionne’s plan to combine Fiat and Opel.
The Magna plan requires about 10,000 people to leave Opel, but all four German assembly plants will remain. A plant in Belgium and the two Vauxhall plants in the UK, Luton and Ellesmere Port, which employ 5000 people, look to be in the most danger.
British unions have asked the UK government to do more to safeguard jobs at the Vauxhall plants, but there seems little can be done.
“The Germans have been central to this. We appear to have been on the sidelines," said Derek Simpson, joint general secretary of the Unite union, which represents UK car industry workers.
"With the German plants literally guaranteed security, thanks presumably to the German government's involvement and the billions of euros that they seem to be putting up, that causes a worry for everyone else." Business secretary Lord Mandelson said he would seek swift confirmation from the Canadian firm that none of the Vauxhall jobs in Britain would be lost.
But union leaders criticised Lord Mandelson for not being more involved in the negotiations, which took place in Germany and were led by German Chancellor Angela Merkel.
Meanwhile, a court in Stockholm, Sweden on Friday granted GM's loss-making unit Saab a further extension to its protection from creditors as a local newspaper named car-maker Koenigsegg, the Renco Group and Fiat SpA as potential buyers for the brands.
Court protection was extended until August 20, allowing Saab to line up a new owner and restructure its business.
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