When Russian automaker GAZ teamed-up with Canada’s Magna Corporation to make a play for GM’s Opel division, TTAC’s Best and Brightest saw the danger: the Russians could use GM’s global small and midsize platform to build cars to compete with Chevy in the Motherland. “Ви́лами на воде́ пи́сано!” they proclaimed. True dat; the deal was written with a pitchfork on a flowing water. Wabusinessnews.com reports that the German government snookered GM; the feds will only provide funding for Opel if Magna is the preferred bidder (over remaining rival RHJ International SA). So why didn’t GM bite the proverbial пуля?
Turns out Uncle Sam’s $62 billion bailout has left the artist formerly known as the world’s largest automaker feeling a bit bolshy.
‘This is not something they would have chosen to do in the first place. It was necessary for financial reasons,’ said Peter Kelly, senior director of global forecasting with J.D. Power and Associates, in Oxford, England. ‘But when the finances looked a bit better, not just in Europe but at home, it could be reason to take stock again.’
So where does that leave Opel?
Under an arrangement formed earlier this year to keep Opel out of GM’s filing for bankruptcy protection, 65 per cent of the carmaker has been formally under the care of a trustee since the beginning of June, with GM holding the remaining 35 per cent.
The Germans aren’t happy with the status quo. But it’s hard to see how they can force GM to sell Opel. (They can, of course, let it go bankrupt as and when.) Despite the fact that the U.S. government owns GM, and the Obama administration has declared its intentions to remain non-interventionist on the matter. We shall see.
[Thanks to Pete Moran for the link.]
Handing a Russian competitor the keys to Opel would be a very dumb strategic move for GM. Likewise, handing a Chinese competitor the keys to Volvo would be stupid for Ford.
Seeing Opel and/or Volvo go into the hands of other already established automotive players is much less of a strategic bad move than it is to put these capabilities into the laps of new would be competitors.
Opel Schmopel. I just want one of those GAZ Volga wagons. Looks like a cross between a Kaiser and a Checker.
Interesting. After World War II, the present-day Russia’s predecessor state (the U.S.S.R.) was given the Opel Kadett’s German tooling as war reparations, from which the Soviets built the Moskvich.
At least this time they’re buying.
i’d rather gm not sell Opel or at least sell it when they can get more for it or sell it to the Germans without rights to the platforms frankly, i just, feel like selling it is giving up.
Many Tier 1 competitors of Magna would like to see them get distracted and trying to run a car company.
Many Tier 1 competitors of Magna would like to see them get distracted
Yup. Hyundai Mobis is already making pitches to Magna customers.
The conspiracy theories around the WWW think that Germany is trying to give Russia Opel in return for long term energy contracts.
“The conspiracy theories around the WWW think that Germany is trying to give Russia Opel in return for long term energy contracts.”
Let the tinfoil hat brigade have their fun – the reality is there are no other interested buyers other than Magna/Sberbank and a Belgian hedgefund.
The German govt. is only going to provide loans to a group that provides commitments about German factories and jobs and hedgefunds are as popular as whores with VD.
The favored option is to let Opel die – which would benefit VAG – but with an election due soon jobs must be saved. If the deal doesn’t happen before the election I bet most of the govt. support will disappear.
Perhaps GM would be more successful if they put it up on eBay!
The German union and the state have a once in a lifetime opportunity coming their way. Grab that tarbaby!