The Wall Street Journal reports GM could conclude its Opel division sale by as early as Thursday, after Fritz Henderson and German officials both signaled that talks were nearing an end. Magna and its backer Sberbank will put down €500m ($740m) for 55 percent of Opel, while Opel’s labor unions have agreed to €265m worth of cost savings. The German government aid package said to total €4.5b through 2015 has yet to be finalized, but this apparently will not affect the deal. The major issue still under negotiation is the potential job loss across Europe, as the EU has already warned Germany that it my not “buy” jobs with its aid package at the expense of other EU nations. Which means Spain, Belgium, Britain and Poland still have to play “shuffle the jobs.” Magna has said that Opel could shed as many as 10,500 jobs, including 4,000 in Germany. On the upside Opel’s unions are getting ten percent of New Opel, although their decision making power is another of the issues still being negotiated. GM fought long and hard to prevent the sale of Opel to Magna/Sberbank, but with the major obstacles to the deal overcome there’s little left to do but grin and sign the papers. And then sit back and watch as Opel’s technology is leveraged to create a modern (and heavily subsidized) Russian auto industry which will challenge Chevy’s position in the Eastern European markets.
I think Magna will come to regret this deal. Even with Opel’s technology, there is a reason why Opel is failing along with GM. Opel will probably become a money pit for Magna, which will not be welcome at a time when cash is not in great supply.
Curious, anyone know what GMs current global sales rank would be sans Opel?
Bunter
With AvtoVAZ (Lada) soon going bankrupt, in all likelihood, the Russian mafia called the government will require a new means of siphoning off monies. Sperbank, and Opel. Magna are just there for window dressing.
Why haven’t we heard from Bertel Schmitt lately?
I read last week that GM are projecting sales of 1.16M units for Opel in Europe in 2009, at a loss of €3Bn est. Subtract that from GM’s global sales. I say global, but let’s be honest, they are now a regional player, it’s just that they don’t seem to realise it yet.