Magna may get financial aid from Russian firm to buy Chrysler
Magna International, along with fellow Canadian company Onyx Corp., has a bid in for a stake in Chrysler, and now additional funds may be coming from Russia. Edmunds' Auto Observer is reporting that Russian billionaire Oleg Deripaska is ponying up $1.54 billion to expand Magna into Eastern Europe, where Deripaska controls Russian Automaker GAZ. Magna is already working with GAZ on several projects, including a new plant in Nizhny Novgorod.The $1.54 billion could be used to help Magna put together the necessary funds to buy Chrysler, and it represents yet another reason many consider Magna to be a front-runner to own the automaker. The UAW prefers the Union-friendly supplier wins out over private equity groups like Cerberus and Blackstone, and Magna is also profitable, with record revenues in the first quarter of this year.
It seems like just yesterday when the words "Supplier" and "Bankruptcy" went hand in hand, and here we are half-way through 2007, and Magna International seems to be on the precipice of owning the automaker for which it supplies parts. Oh, how the tables have turned.
[Source: AutoObserver]
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Reader Comments (Page 1 of 1)
Avinash machado 6:58AM (5/11/2007)
Well good thing the cold war got over quite some time ago.
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kanadian 8:35AM (5/11/2007)
LADA-Chrysler!?!?
WOW
What a stew.
but seriously Magna is not done yet with impressing and Belinda is just as much oops Did I say that?
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Arnie 9:49AM (5/11/2007)
Does anybody know what % the Russians will own in Magna after that transaction?
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Pinkerton 10:33AM (5/11/2007)
Last night, the CBC did a report on Magna and this deal. Run time is 3 minutes.
http://www.cbc.ca/mrl3/8752/vsu/wmv-hi/charles-magna070509.wmv
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Tool 10:56AM (5/11/2007)
This seems like a really dumb and ill-timed strategic move by Magna.
Although business is increasingly global, bringing in a Russian company to invest in a Canadian company that wants to buy an American Icon (Chrysler) smacks of stupidity.
I'm still pulling for Cereberus and Wolfgang Bernhard to run Chrysler.
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why not the LS2/LS7? 11:25AM (5/11/2007)
The Russians should be barred from bidding.
The entire country is run as a front for mobsters now.
No good will come of this.
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Richard Warren 12:29PM (5/11/2007)
The Russians are coming! The Russians are coming!
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bill 12:40PM (5/11/2007)
haha - canadians becoming ever more joined at the hip with the evil american empire
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MH 2:03PM (5/11/2007)
I've said it before and I'll say it again.
I hope Daimler keeps Chrysler. It's definitely the lesser of many evils.
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Barney 5:18PM (5/11/2007)
Why not have a Russian dealer network? If anyone besides North Americans buy pickup trucks, Russia would be the ideal base. It remains Chrysler's last chance. If Magna sells the company off, then Chrysler will probably be sold off in pieces. GAZ will not own Chrysler but will be a good dealer network for the company. Magna has already said that lots of Chrysler will be reworked and many lay-offs to be expected. "You got to cut off the infected parts to keep the rest healthy".
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whofan 8:03PM (5/11/2007)
When a parts supplier and automaker share same intrest and profits. We could very well see Chrysler become the most reliable vehicle on the road.
I`ve always believed that an automaker should do most of its work in house. The Union should realise that there should be a varience in pay to job classifcation.
The auto companies whent outsourcing for cheaper labor. A reversal in this trend would be welcome for quality sake. Fords` diesel problem is prime example.
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Barney 11:16AM (5/12/2007)
Re: 8)"Canadians becoming ever more joined at the hip with the evil American empire"
Germans presently own Chrysler, a Canadian company wants to buy a share and a Russian magnate wants part of the action. Where do Americans fit in the picture?
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tick 4:46PM (5/12/2007)
it's not Onyx, it's Onex Corp
they are an investment firm that buys up properties in similar state as chrysler is now. they have been in auto parts before, as well as aerospace with some success. it'll be interesting to see what happens, Buzz seems to be on board...
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