Autoblog

Wikileaks docs show GM in scrap with Kremlin over Opel sale two years ago

Zach Bowman — Mon, 25 Jul 2011 15:58:00 EST

Filed under: Europe, Government/Legal, Plants/Manufacturing, GM, Opel, Vauxhall, Russia

As it turns out, General Motors may have nixed the sale of its Opel and Vauxhall brands in 2009 due to the fact that the proposed buyers added 31 amendments to the deal after it was signed. The news comes courtesy of reports that cite U.S. diplomatic cables obtained by Wikileaks.

Some of those demands included the right to sell some of the automakers' two factories to a carmaker owned by the Russian state. That would give the foreign automaker access to Opel technology and patents.

Originally, Magna, a Canadian parts manufacturer, and the Russian bank Sberbank agreed to purchase a 55-percent stake in Opel from the German government in a Memorandum Of Understanding. According to The Daily Mail, After the deal was inked, Magna and Sberbank continued to pile on amendments to the MOU, and GM felt that the German government didn't fully understand exactly what the buyers wanted. As a result, the American automaker pulled the plug in 2009.

Wikileaks docs show GM in scrap with Kremlin over Opel sale two years ago originally appeared on Autoblog on Mon, 25 Jul 2011 15:58:00 EST. Please see our terms for use of feeds.

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GM once again mulling sale of Opel?

Zach Bowman — Thu, 09 Jun 2011 10:30:00 EST

Filed under: China, Europe, Opel

The rumormill is churning at full steam over whispers that General Motors is once again considering selling Opel. According to Reuters, two German magazines have reported similar tales without citing any sources, saying that GM is concerned that Opel won't be able to return to profitability anytime soon. The General hasn't commented on the situation publicly, but called the talk speculation in a letter to its employees. That comes after Dan Akerson, CEO of GM, said that Opel is continuing to bleed cash despite selling more vehicles than before.

The murky reports of Opel's sale claim that the automaker could go to a number of potential buyers. Those include the usual suspects like any one of a multitude of unnamed Chinese automakers or more curiously, Volkswagen. The logic behind a VW purchase of Opel is based on the fact that the people's automaker has fat stacks of cash on hand and an unwavering thirst to be the world's largest automaker. Reuters reports that Volkswagen refused to comment on the situation.

GM once again mulling sale of Opel? originally appeared on Autoblog on Thu, 09 Jun 2011 10:30:00 EST. Please see our terms for use of feeds.

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BREAKING: GM board opts to call off Opel sale

Chris Shunk — Tue, 03 Nov 2009 18:25:00 EST

Filed under: Car Buying, Europe, GM, Opel

After months of negotiations with supplier Magna and its Russian partner Sberbank, General Motors has decided not to sell its Opel unit. The General mentioned in the post-jump press release that the new board of directors came to the decision to keep Opel due to GM's recovering financial situation coupled with an improving business environment in Europe. GM's move to keep Opel comes just one week after EU's Directorate-General for Competition began investigating the sale to Magna to be sure it was based on sound financial footing and not because of political influence from Germany.

GM CEO Fritz Henderson added in the company's release that the process was difficult for all parties but in the end "our goal has been to secure the best long-term solution for our customers, employees, suppliers and dealers, which is reflected in the decision reached today. This was deemed to be the most stable and least costly approach for securing Opel/Vauxhall's long-term future."

Now that GM plans to keep Opel in its brand portfolio, the next move is to proceed with a painful restructuring that could see the loss of 10,000 jobs and the elimination of 30% of the Euro unit's structural costs. The reported tally for the restructuring could cost GM upwards of $4.4 billion, and some of that could come courtesy of cash received as part of the company's $50 billion US government bailout.

Now that GM is out of bankruptcy, the company is reportedly no longer barred from using bailout funds for countries or regions outside of the US. It's also possible that GM could get loans from Germany and or Great Britain to finance the restructuring. The Detroit MI-based automaker also intends to work with European unions to develop a plan that contributes to Opel's restructuring. Hit the jump to pour over GM's press release.

[Source: Detroit News]

Continue reading BREAKING: GM board opts to call off Opel sale

BREAKING: GM board opts to call off Opel sale originally appeared on Autoblog on Tue, 03 Nov 2009 18:25:00 EST. Please see our terms for use of feeds.

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Opel fate still up in the air as Russian involvement reportedly complicates Magna offer

Sam Abuelsamid — Fri, 07 Aug 2009 08:58:00 EST

Filed under: Government/Legal, GM, Earnings/Financials, Opel, Vauxhall

Over on General Motors' Europe "Driving Conversations" blog, VP John Smith has posted an update on the company's negotiations to sell a majority stake in Opel and Vauxhall. Although no final decision has been made yet, it's looking increasingly likely that the previous tentative agreement with Magna International may be usurped by a bid from RHJ International. This, despite the fact that the German government has been favoring the Magna bid because of the suppliers commitment to preserving jobs at German factories.

However, most of the money for the Magna bid is coming from the Russian government and Russian bank Sberbank. The involvement of multiple parties from different countries is making things difficult because of concerns with transferring intellectual property. GM's move to a global development process over the past decade means that Opel shares in much of the technology for hybrids, fuel cells and electric vehicles that the automaker has developed. For obvious competitive reasons, GM wants to retain control of much of that institutional knowledge, and the Belgian holding company seems to be much more amenable to that idea. Smith promises more updates in the coming weeks.

[Source: General Motors]

Opel fate still up in the air as Russian involvement reportedly complicates Magna offer originally appeared on Autoblog on Fri, 07 Aug 2009 08:58:00 EST. Please see our terms for use of feeds.

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German economics minister reportedly says no to Opel buy-back option for GM

Sam Abuelsamid — Mon, 20 Jul 2009 09:29:00 EST

Filed under: Government/Legal, GM, Opel

One of the many clauses that General Motors is reportedly trying negotiate into any deal involving majority control of Opel is the option to eventually buy back the stake it is selling.

As the theory goes, GM isn't selling Opel because it feels like it doesn't add value - Opel in fact offers huge value to GM and has had lead responsibility for developing the global mid-sized, compact and small car platforms being used by the automaker. Instead, Opel is on the block because the home office needs the cash. Thus, if GM is able to be flush with cash once again, it would like to reserve the right to regain to full control.

According to Reuters, Karl-Theodor zu Guttenberg, Germany's economics minister is having none of that business. In fact, he has apparently told Frankfurter Allgemeine Sonntagszeitung that no such clause would be allowed if Opel is to receive any German government aid. The German government is also wary of any financial groups like Belgium's RHJ International taking a stake - instead, they reportedly prefer an owner with a long term interest in the industry like Magna International.

[Source: Reuters | Image: Ralph Orlowski/Getty]

German economics minister reportedly says no to Opel buy-back option for GM originally appeared on Autoblog on Mon, 20 Jul 2009 09:29:00 EST. Please see our terms for use of feeds.

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German government approves majority sale of Opel to Magna, Russians

Sam Abuelsamid — Sun, 31 May 2009 11:44:00 EST

Filed under: GM, Opel, Russia

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]

German government approves majority sale of Opel to Magna, Russians originally appeared on Autoblog on Sun, 31 May 2009 11:44:00 EST. Please see our terms for use of feeds.

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REPORT: Opel's 'preferred' buyer(s) expected to be named mid-week

Frank Filipponio — Tue, 26 May 2009 06:58:00 EST

Filed under: GM, Opel, Fiat

It looks like the German government is about to announce its list of preferred bidders for Opel this week, and the list is likely to include Fiat and Magna. Why would this list be coming from Chancellor Angela Merkel's spokesman and not, say, GM? Because the German government will have to step in with financing guarantees when the deal is made.

Saturn fancier and parts supplier extraordinaire, Magna International, and Italian automaker Fiat S.p.A. are the likely mentions. Magna had been seen as the frontrunner until Fiat sweetened its offer recently. Another name likely to make the list is RHJ International, a Belgian holding group.

Germany wants to keep all four Opel plants running and obviously wants to prevent a complete collapse of the company, but at least one government official thinks an orderly insolvency might be a better option. Economy Minister Karl Theodor zu Guttenberg has called the offers inadequate and has suggested that insolvency might be necessary to save some portion of the company in the long run. That hasn't sat well with other officials.

With Chrysler and GM here in the States, others think that everything should be done to avoid insolvency, and protect Opel's 25,000 workers from unemployment. GM has until June 1 to show its final restructuring plan to the U.S. government, and the sale of Opel is a large part of it. Even if the sale occurs before then, GM is seen as ever more likely to follow Chrysler into Chapter 11 however.

[Source: Automotive News - Sub. Req.]

REPORT: Opel's 'preferred' buyer(s) expected to be named mid-week originally appeared on Autoblog on Tue, 26 May 2009 06:58:00 EST. Please see our terms for use of feeds.

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REPORT: Magna could use Opel to produce vehicles for other automakers

Chris Shunk — Tue, 19 May 2009 08:58:00 EST

Filed under: Ford, Opel, Peugeot, Fiat

General Motors is very close to selling its Opel unit, with Canadian supplier Magna and Italian automaker Fiat among the suitors. If Magna and its Russian partners Gaz and Sberbank scores the winning bid for Opel, the parts supplier has big plans for the German brand and its factories. Automotive News Europe and German newspaper Welt am Sonntag both have quoted sources within Magna stating that the supplier could produce vehicles for other automakers. Furthermore, both Ford and Peugeot are reportedly interested in using the factory space, which makes sense considering the cost of opening new facilities.

While GM will have the final say regarding an Opel sale, the German government will have considerable sway in the matter. After all, the German government is likely providing up to 3.3 billion euros in financial support to keep Opel afloat. That may give Magna an advantage, since Fiat has said that it would close the Opel factory in Kaiserslautern, Germany, while Magna doesn't plan to close any German facilities.

[Souce: Monsters and Critics]

REPORT: Magna could use Opel to produce vehicles for other automakers originally appeared on Autoblog on Tue, 19 May 2009 08:58:00 EST. Please see our terms for use of feeds.

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