GM worried about Magna deal for Opel, sign backup deal with RHJ, Beijing Automotive
Magna's plans for engineering changes to Opels is worrying to GM because that alters the economics of the General's parts sharing. Magna also wants access to future GM technology, such as fuel cells, that GM doesn't want to hand over. GM is additionally worried about Sberbank, which has already stated its intention to sell its 35% stake once Opel is restructured; GM wants to have a hand in selecting the buyer, and it doesn't want its tech buoying the Russian car industry, nor does it want to compete with what could essentially be Russian versions of Opels.
Magna has its own problems as well, with at least one manufacturer telling the Canadian company that it could be a parts supplier or a competitor, not both. With all those fires to be doused, GM has entered into non-binding agreements with China's Beijing Automotive, and Belgium's RHJ International investment bank -- which looks like another Cerberus scenario -- as backup plans. As for the Germans, it was claimed today that no decision on Opel will come before the country's national elections on September 27.
The only problem with that is GM has stopped all payments to Opel, and the German firm is said to be losing €5 million a day. At that rate, the German government's €1.5 billion bridge loan to Magna that was part of the potential deal will run out before the elections. That means, as we've seen so many times before in this saga, something's got to break.
[Source: Bloomberg via TTAC]
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