Fiat and Magna emerge as serious bidders for Opel
General Motors is looking for outside investment into German automaker Opel, and new reports coming out of Europe indicate that two main bidders have separated from the rest of the pack: Fiat, which we've already heard about, and Magna International. Oleg Deripaska, a familiar name to those who follow the auto industry closely, is said to have aligned himself with Magna in an attempt to acquire a 50% stake in Opel.
Fiat chairman Luca de Montezemolo has denied that his company is interested in purchasing General Motors' Opel brand, but reports from a number of reputable sources, including Fiat's own CEO Sergio Marchionne, indicate otherwise.
GM is said to favor a single bidder, which may improve Fiat's chances somewhat. Union officials and policymakers in Germany, on the other hand, have voiced concerns over the Italian automaker's plans, saying they welcome the alternative plan from Magna. It should be interesting to see how this all plays out in the coming weeks.
[Source: Automotive News - sub. req'd]
_opt_thumbnail.jpg)
_thumbnail.jpg "2011 Audi A8: Live from Miami")
Reader Comments (Page 1 of 2)
13enS 6:32PM (4/28/2009)
Wow, is Fiat making a move for it! Is Ford going to be selling anything any time soon? Fiat's buying!
Reply
Sektor 6:59PM (4/28/2009)
Isn't if funny that a company in financial troubles herself (Fiat) is a "serious bidder" for Opel? They had a $411 million euro loss in Q1 this year ($540 million USD).
Yaroukh 7:43PM (4/28/2009)
Sektor: €411m in these days is nothing
Bloke 10:45AM (4/29/2009)
Sektor - Fiat made a Q1 loss this year but only because of the state of the global car industry and economy; that loss isn't too significant either given the sheer size of the company. In addition, it still has some 12 billion euros of reserves on its balance sheet and can afford to invest in Opel.
Swede 6:36PM (4/28/2009)
Excellent. I believe either of these two would do fine, obviously the germans will favour Magna because they are (half truth as it may be) from Austria. Fiat is from Italy, and Germans don't trust Italians, especially not when it comes to taking over their beloved car industry.
Reply
Swede 6:37PM (4/28/2009)
In the peoples eyes. I know Magna is canadian, but ask the common man and he'll say "Magna-Steyr".
Andrew 8:01PM (4/28/2009)
Even if they think of Magna as Canadian that's a whole LOT better than Italian!
I certainly agree with you on the German view, Italians are not a good match. Germans in general have little respect for Italy, possibly with exception for Northern Italy (industrial heartland) and the German speaking autonomous provinces.
Canadians are more like the Germans than the Italians. Their image is more clean, effective, orderly and businesslike. The Italians on the other hand.. Berlusconi does Italy no favors!
AUTOMANIAC 7:36AM (4/29/2009)
oops we are feeling a little jelous aren't we? and why? don't feed such emotions and speak about cars here.
ricky 6:59PM (4/28/2009)
Give this one to Magna, Fiat needs to focus their efforts on Chrysler and themselves. Marchionne obviously thinks this is going to be easy....
Reply
Judy Zik 10:38PM (4/28/2009)
+1
Fiat Auto may be a subsidary of a large company but they are still are pretty small player in the Automotive world. They don't have the resources to digest gobbling up Chrysler and Opel at the same time without getting indigestion. It is also going to take time to untangle Opel from the GM web and in a perfect world GM would like to be able to continue to work together with an independent Opel (think Ford and Mazda). If the bean counters push through a sale to Fiat you can kiss that goodbye. Magna doesn't have the same conflict of interest and they bring a lot of design expertise and resources to the table. It would also put Magna a bit more in GM's court which could be very helpful. We are talking about a supplier with the resources to create a battery powered Focus all on it's own that Ford is seriously considering putting into production (Magna has even offered to build it). This is also the same company that has built entire vehicles for various makes and designed key features like Stow N Go.
The best possible outcome for GM would be for Magna to take a major stake in Opel and GM to remain a shareholder and partner.
Bloke 10:52AM (4/29/2009)
Fiat is hardly small - it turns over roughly US$80 billion a year; slightly more than PSA. That's approximately half the amount of either Ford and GM's global group of companies.
Judy Zik 3:38PM (4/29/2009)
Depends on what your concept of small is. Fiat moved 2,152,500 cars and light commercial vehicles in 2008. That is in the same ballpark as what Chrysler generally moves in a year worldwide (Opel/Vaux normally move about 1.5 million). When you consider GM and Toyota liked to move close to 10 million a year each before the recession hit that makes them a small player by comparison. Their sales and experience are also heavily weighted in their home market (Italy). They have no clue when it comes to the North American market and they have also had little sucess in Germany. People seem to think it is a simple matter of them signing their name and Chrysler is saved. In the real world nothing is that simple. Merging two different corporate cultures and leveraging the assets from both companies while finding cost savings is very labour intensive. It is a big gamble (just ask the former Dumbler Chrysler employees). A large number of managers from Italy are going to have to get on a plane and spend a good part of the next few years of their lives sorting out these issues. Fiat just doesn't have the resources to send another team to Germany to pull off the same job at the same time and get it right.
Bloke 5:03PM (4/29/2009)
My concept of "small" is knowing that Fiat doesn't only deal with cars - over the hundred or so years it has been in business, it's built everything from light aircraft to heavy plant. As far as cars and commercial vehicles are concerned, they have manufactured products on every single habitable continent with the exception of North America and Australia for many decades. While US$80 billion in annual turnover does not make them the size of Ford, GM or Toyota, they remain a significant size, roughly equal in size to PSA and two-thirds the size of VAG.
While Fiat's primary market is Italy (just as Renault's is France), they have hardly been unsuccessful in other European countries or other markets around the world, factoring out North America where no mainstream European manufacturer (Ford of Europe, Opel, Renault, Fiat, Peugeot, Citroen) has achieved any sizeable success with the notable exception of VW - and even they have a very limited range there compared with practically every other global market they sell cars and commercial vehicles in. Over the years, products such as the 127, Uno, Tipo and Punto have enjoyed pan-European success, including Germany.
The partnership will provide Chrysler with Fiat's superb small-car technology - in Europe, Fiat and its group have won the COTY title a staggering twelve times alone in the 44 years the contest has been running. In turn, Fiat will have access to a larger car platform inexpensively following comparative failures with the Volvo-PSA and GME tie-ups previously.
There's no guarantee in any business and if people are thinking the only reason for this partnership is to save Chrysler, then they need to think again. However, it gives Chrysler a better chance than certain bankruptcy otherwise.
jpm100 7:26PM (4/28/2009)
Does Fiat have the management to take on both Chrysler and Opel? I have to wonder if Fiat is going to be the bad guy that parts out the pieces and close the door. Its not like they have a US presence that will be hit with any negative reaction.
Reply
Max Fun 8:19PM (4/28/2009)
It seems like Fiat is hedging its bets. It doesn't seem like the UAW is going to give in to Fiat's demands, so it's possible that Fiat would walk away from the Chrysler deal. If the Chrysler deal doesn't go through, they can still buy over Opel. Either that, or they're using Opel to signal to UAW that they are ready to walk if they don't give in.
mikecanada 10:11PM (4/28/2009)
Frank Stronach has wanted to be in the manufacturing element of automobiles for a long time. I bet he's glad he lost the bid for Chrysler! I'd be fascinated to see what Mr. Stronach would do with the company. The guy seems to be able to sell just about anything.
Reply
bssplayr 8:13AM (4/29/2009)
Just don't let Belinda run it. I'd give her credit for trying such a wide variety of interests in her life, but she simply hasn't SUCCEEDED at them; she doesn't seem to have inherited her father's touch in that regard.
...I don't mean to berate her, either, especially as she's been fighting breast cancer.
drsquid 12:59AM (4/29/2009)
Hopefully Magna would also buy out Saturn and then we would actually have a real Canadian car company here in North America (as apposed to companies promoting Canadian built American cars as Canadian)
Reply
xtasi 12:30AM (4/29/2009)
Sadly, some of GM's best cars (yes cars) come from Opel. (Aura, Malibu, Astra) didn't opel tuned the Cobalt SS that set the record for ring for a fwd? I thought Opel was making money, why would GM get rid of it?
Reply
richard 1:35AM (4/29/2009)
I think the key to fiat's bids for chrysler and opel is that they have held the european record for two years running for the lowest emission levels. in europe the CO2-based taxes are getting heavier and are present in everything from the scrappage systems to the bonus-malus systems. most manufacturers are trying to "eco-brand" their cars (the germans have been fined by the swiiss and some scandinavian authorites for some of their "eco-branding" because in fact they have by far the worst emission levels, even in the small car segments) by doing typical things like using tyres with lower roll-resistance, implementing aerodynalic improvements and using longer grear ratios. These changes, however, only lower fuel consumption and emission level by a couple of percentage points. Fiat, on the other hand, have already shown their new multiair engine which offers 25% better consumption and up to 60% lower emission levels!! It is only natural then that the Chrysler turnaround be pinned on a partnership with Fiat. The days of the gas-guzzlers are over. Living in a bubble has a disastrous effect- as can be seen by the US and Swedish car industry, while the Germans should be next.
Reply