German government approves majority sale of Opel to Magna, Russians
With General Motors expected to file for chapter 11 bankruptcy protection in New York on Monday morning, negotiators in Germany scrambled to finalize a deal to save Opel from insolvency. Following a six-hour meeting in the German Chancellor's office in Berlin on Friday evening, a deal was finally announced by finance minister Peer Steinbrueck. Although an overall deal to transfer control of Opel from General Motors was reached, details are still being worked out and a final contract won't be signed for several more weeks. Under the deal announced early Saturday morning, GM will retain a 35-percent stake in Opel, which would allow the automaker to continue sharing technology with the German brand. Russia's government-controlled Sberbank is providing most of the financing for the deal and also gets a 35-percent share. Canadian auto parts maker and contract assembler Magna International will own 20 percent and the remaining 10 percent will go to Opel employees.
The German government will also provide a $2.1 billion bridge loan to Opel to help it keep operating during the transition phase. A key to the deal was German government demands that Opel assets be protected from GM creditors during a US bankruptcy proceeding. Opel will apparently be placed into some sort of trust in order to keep it whole and preserve its value for the new majority owners. President Barack Obama agreed to the deal with German Chancellor Angela Merkel during a late-night phone call.
It's not known at this point how GM's UK operations at Vauxhalll figure in to all of this and whether any of it will be preserved, consolidated into Opel, or sold off separately.
[Source: Reuters]
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Reader Comments (Page 1 of 2)
Diego3336 12:05PM (5/31/2009)
Poor Opel...
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Motor_Yakuza 2:48PM (5/31/2009)
Yep, nothing good comes when the russians are in.
inteller 4:05PM (5/31/2009)
whatever, this is great for Opel and Canada. I hope we see some Opels here in the US (not crappy Saturn rebadges either)
vor 5:10PM (5/31/2009)
Right because Chelsea F.C is doing so bad under a Russian owner (Abramovich) that put £600 million into it.
Russians and Muslims are the only people it seems to be okay to make prejudice statements against in the politically correct west.
Sea Urchin 12:33PM (5/31/2009)
"Under the deal announced early Saturday morning, GM will retain a 35-percent stake in Opel, which would allow the automaker to continue sharing technology with the German brand. "----------this is all GM needs for now, they need to bring some of those cars in USA. And once GM will repay the loans and will start making money again they will be able to buy additional stake in Opel, if they feel they want it.
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JC 1:19PM (5/31/2009)
I don't think GM is going to want to take a larger stake in Opel once their fortunes turn around. If anything, I think they will expand the Chevy brand in Europe once they're comfortable enough with their home operations. They already sell a lot of rebadged Daewoos as Chevrolets in Europe, and the new Cruze was always going to be a Chevrolet there, not an Opel.
A new question is, do Magna and its partners now pursue Saturn? Saturns are already tied to Opel products in the minds of North American consumers, and they could use the dealer base to complete what GM couldn't...make Saturn the American face of Opel.
Seems like a logical step to me, but I think Penske is the current front runner for Saturn and his plans seem to be to sell Korean or Chinese cars under the Saturn name.
The back and forth of brands these days is so confusing.
Mike 1:53PM (5/31/2009)
I agree with JC, the Saturn sales network would be an ideal outlet to sell Opel products through. However, I disagree that Americans associate Opel with the Saturn brand - other than a few hundred auto buffs, I doubt many Americans today remember Opel when it was sold last in the '70s at Buick dealers. Although popular at the time, Opel was always treated as a stepchild by GM in the US and not allowed to flourish. Today's Opel cars are excellent and would offer a good alternative to VW and Fiat in this country. There is no need to retain the Saturn brand name, it means nothing.
Sea Urchin 1:51PM (5/31/2009)
If Magna will buy Saturn it will become a direct supplier to GM and a direct competitor to GM in NA. Could be a tricky situation.
william tell 2:32PM (5/31/2009)
@ sea Urchin
I was thinking the same too. Surely GM won't let their most important brand outside NA go so easily. Expect many many strings attached to the Magna deal such as GM having first refusal on buying back the remaining 65%.
Charlie 1:19PM (5/31/2009)
Is this going to include Vauxhall?
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Tagbert 2:31PM (5/31/2009)
Charlie,
Aren't you the division head of Vauxhall? It must suck that no one invited you to the party. I'm sure that they will get around to telling you all about it eventually.
Tagbert 7:57PM (5/31/2009)
BTW - Car Magazine is reporting this as "Magna is buying GM Europe" and includes Vauxhall in that. (is there more to GM Europe that those two?)
http://www.carmagazine.co.uk/News/Search-Results/Industry-News/Magna-agrees-to-buy-GM-Europe-latest-news/
polo 1:37PM (5/31/2009)
Great news. Magna wanted Opel to use as a platform for their electric models. I wouldn't be surprised to see some of these models coming over here as EVs.
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TommyS 2:01PM (5/31/2009)
It's not Magna, it's Sberbank and GAZ. Opel will be produced on the GAZ factory in Russia, which now produces Volga Siber (current Chrysler Sebring). GAZ and Sberbank wouldn't do good to Opel. They need Opel's technologies and innovations. That's it. I'm upset.
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ij70 3:35PM (5/31/2009)
I am with Tommy on this. Russians want modern technology, production methods and something close to home. This is just about perfect for Russia and not too bad for Opel.
tuxchown 3:13PM (5/31/2009)
Whatever happens, I just hope to see Opel survive and their employees retain whatever jobs they can. Losing Opel completely serves no one.
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ij70 5:20PM (5/31/2009)
There is some talk that European labor laws are too stifling and do not allow companies to restructure.
Rick c. 5:21PM (5/31/2009)
Magna succeeded in beating FIAT because it guaranteed that none of the four Opel plants in Germany would be shut down. The rumormill details imply they will cut 20% of the 55,000-strong workforce of Opel / Vauxhall in Europe, but only 2,500 will come from Germany. Remember, there's an election coming up in Germany, and saving jobs will get you votes. This decision was strictly political, not business.
tuxchown 5:37PM (5/31/2009)
Don't be fooled. It is *always* political. Always.
Cmicasa the GREAT 8:57PM (5/31/2009)
A coupla points:
GM will still retain 35% of Opel. Magna and Sberbank at 20% and 35% respectively will be lower on the totem poll than GM when it comes to decision making. Truth of the matter is.. in regards to our interests.. cars.. Sberbank will, probably be no more pro-active than Cerberus was in Chrysler's product implementation.
Second... GM Europe is not a part of this deal. Opel/Vauxhall apparently is. Opel/Vauxhall literally buy product design and engineering from GM Europe. One quick tell of this would be if this deal involved Saab as well.. which it does not,. GM Europe includes: Opel, Vaux, Saab, and GM Powertrain Europe. This deal is very much the same as GM selling off a part of a theoretical combined "Saturn/Hummer" unit if it existed.
GM Powertrain Europe remains a part of GM Europe/GM Global.
Also consider that European Chevy sold over 500K last year, and is being primed to take over the lower end market that Opel is attempting to exit. With a more fleshed out line-up from both Cadillac and Buick, we may see in the next decade some strong competition to GM's 35% stake in Opel.
The biggest obstacle in that is Western Europeans... unlike Americans.. are extremely loyal to their brands. Even the Japanese have been unable to truly penetrate the Euro market.
Funny that the people of Germany, Brit, Spain, Italy. etc.. seeming have no real issue with helping their industry.. while Americans,the sell outs that they are, are crying like babies at the thought of their Gov subsidizing their last large manufacturing industry. (Roll Eyes)
I own an 07 Tahoe, 06 G6, 05 9-3, 08 Z51 Vette, 09 CTS-V.. and I LOVE U GM, and please put me down for a Volt in 2010. By then my G6 will have about 115K miles on it... still BULLET-PROOF.
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