Autoblog

BREAKING: GM board recommends coughing up 55% Opel stake to Magna, Sberbank

Jeremy Korzeniewski — Thu, 10 Sep 2009 11:30:00 EST

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

Finally, after what seems like an eternity of protracted negotiations, bickering and stalling tactics, General Motors has agreed to sell a majority stake in its European operations to Magna International and its Russian financial partner Sberbank. Under the terms of the deal, 55% of Opel and Vauxhall will be owned by Magna/Sberbank; The General will hold on to a 35% stake and employees of the two companies will hold the final 10 percent.

Naturally, the European automakers will continue to offer the recently redesigned Astra and Insignia, and future technologies - such as the extended-range electric powertrain that will be used in the upcoming Ampera - will be shared between the U.S. and European companies.

According to Automotive News, there are still strings attached to the deal and the German government doesn't expect anything to be completely finalized until after the next set of elections scheduled to take place in Germany on September 27, so the saga is likely to continue. Click past the break for the official statement from GM.

[Sources: General Motors; Automotive News - sub. req'd]

Continue reading BREAKING: GM board recommends coughing up 55% Opel stake to Magna, Sberbank

BREAKING: GM board recommends coughing up 55% Opel stake to Magna, Sberbank originally appeared on Autoblog on Thu, 10 Sep 2009 11:30:00 EST. Please see our terms for use of feeds.

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GM issues a 'No-Decision' on fate of Opel, German government not happy

Jonathon Ramsey — Mon, 24 Aug 2009 07:58:00 EST

Filed under: Europe, GM, Opel

General Motors was meant to decide who would be the winning bidder for Opel last Friday. But it didn't. Instead, GM asked the German government for more information on federal financial assistance available to buyers. The German government would like Magna to take over Opel as it vowed to retain a huge chunk of jobs in Germany, but GM has given every indication of preferring Belgian investment fund RHJ.

GM wants to know how much money RHJ would get in case it was chosen to buy Opel. It looks like GM still has issues with Magna buying Opel and is looking for a way to choose RHJ and save at least a little face with the German government. If RHJ can get an attractive financial package from the feds, it can also save more jobs than it might be inclined to otherwise, and GM doesn't have to worry about Russian competitors using its own technology.

The German government wants none of it, though. It has called on the United States government to get GM to make a decision. That isn't likely to happen, but it shows how intense things are with Opel, politicians, labor and upcoming elections. On a side note, the BBC reported that part of GM's plan could include a buy-back option for Opel, which, if true, would probably make a lot more sense for RHJ than Magna.

[Source: Auto News, sub req'd]

GM issues a 'No-Decision' on fate of Opel, German government not happy originally appeared on Autoblog on Mon, 24 Aug 2009 07:58:00 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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Beijing Automotive bids for Opel; Magna still expected to close deal

Jonathon Ramsey — Sun, 05 Jul 2009 11:07:00 EST

Filed under: China, Europe, GM, Opel, Vauxhall

Even though Beijing Automotive (BAIC) tendered a non-binding offer for Opel, the company is said to have no chance of actually acquiring the brand. General Motors is still in talks with Magna and its partners, GAZ and Sberbank, and according to Sberbank CEO German Graf, "The choice has been made and the question now is of how to structure the deal."

Observers also feel that the GM-Magna agreement is merely waiting on some dotted I's, crossed T's and that the deal won't fall apart unless Magna blows it up or walks away. That hasn't stopped GM and the German government from creating the appearance of courting other bidders for Opel and Vauxhall, including BAIC and Belgium's RHJ.

BAIC appears to be serious, even if everyone assumes that GM's just using it as a decoy. Magna wants to get the paperwork inked by July 15, and that's around the same time that BAIC wants to make a binding offer for Opel's purchase. It's working with Deutsche Bank and PriceWaterhouse Coopers on its proposal, and we can only assume BAIC will be ready with a bag full of cash in the unlikely event Magna exits stage left.

[Source: Auto News, sub req'd]

Beijing Automotive bids for Opel; Magna still expected to close deal originally appeared on Autoblog on Sun, 05 Jul 2009 11:07:00 EST. Please see our terms for use of feeds.

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Marchionne confirms Fiat still interested in Opel

Jonathon Ramsey — Sun, 28 Jun 2009 19:05:00 EST

Filed under: Europe, Government/Legal, GM, Opel, Fiat

Fiat CEO Sergio Marchionne, watching the travails of GM, Opel and Magna from his comfy Italian perch, has sent word that his previous offer for Opel is still on the table if anyone is interested. That offer, though, can't be sweetened because he doesn't "believe we could improve Fiat's offer. It's the most rational one we can put forward from an industrial viewpoint."

It doesn't appear as though anyone's listening. The German government wants to save German jobs, Opel workers are determined to vote down anyone who tries to take them away, and GM wants the most money and the least competition. Fiat's offer doesn't exactly fit that template.

GM and Magna & Co. will dance for a while longer, and if that doesn't work out, then GM will begin again with RHJ and Beijing Automotive. In the meantime, someone's going to have to pay to keep Opel running. Could it be that the most reasonable offer will be left unanswered while the other parties look for more expedient solutions?

[Source: Auto News, sub req'd]

Marchionne confirms Fiat still interested in Opel originally appeared on Autoblog on Sun, 28 Jun 2009 19:05:00 EST. Please see our terms for use of feeds.

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GM worried about Magna deal for Opel, sign backup deal with RHJ, Beijing Automotive

Jonathon Ramsey — Fri, 26 Jun 2009 17:32:00 EST

Filed under: Europe, Government/Legal, GM, Opel

When it came to buying Opel, Fiat's Sergio Marchionne told GM and the German government: "If you have a better offer, take it." They both took Magna, along with its Russian partners Sberbank and GAZ, because that consortium offered a better competitive arrangement and fewer job cuts in Germany. The deal wasn't slated to be finished until September, but it's encountered a few pockets of serious turbulence.

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]

GM worried about Magna deal for Opel, sign backup deal with RHJ, Beijing Automotive originally appeared on Autoblog on Fri, 26 Jun 2009 17:32:00 EST. Please see our terms for use of feeds.

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REPORT: Opel to cut prices 40% in order to save jobs?

Jonathon Ramsey — Fri, 19 Jun 2009 09:34:00 EST

Filed under: Europe, Plants/Manufacturing, Opel, Vauxhall, UAW/Unions

Sometimes deals get made, and then the dealmakers have to employ some pretty creative tactics to get the terms to work. Magna's deal for Opel included taking €1.5 billion in short term loans from the German government, the string attached being that Magna had to guarantee German jobs.

Saving jobs means selling more cars to maintain production levels, and outside observers are suggesting that Opel would need to cut prices by 40% to move enough metal to keep people on the lines. Of course, a 40% drop in prices makes profit almost impossible, and some are saying Magna doesn't care about profits right now. One analyst said Magna and GM might want to increase costs, since Magna would sell more parts and GM would get more royalties. That, however, seem like the wilder side of speculation.

Magna has said the 40% discount hypothesis is absurd. Magna's mandate was to save German jobs -- that doesn't mean other Opel or Vauxhall factories in other countries can't be shuttered. Such a discount would also bring competing automakers into the debate; they would need to fight battles both on the dealer lot and with their government lobbyists, who would question Opel's right to sell cheap cars with government assistance.

[Source: Bloomberg]

REPORT: Opel to cut prices 40% in order to save jobs? originally appeared on Autoblog on Fri, 19 Jun 2009 09:34:00 EST. Please see our terms for use of feeds.

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Opel stake could give Russian automaker an injection of "know-how"

Noah Joseph — Tue, 09 Jun 2009 06:58:00 EST

Filed under: Opel, Russia

If you tried telling us even as recently as a year ago that General Motors would be forced to sell its European assets and that a partnership between a Canadian parts supplier and a Russian bank would step up to take the stake, we'd have probably raised a few eyebrows. But such is the state of the General and the industry at large, with Magna and Sberbank looking poised to take a big chunk of Opel of GM's hands. The question everyone is asking, however, is what the Russian state bank wants with the German automaker.

According to emerging reports, the Russian financial institution could be preparing to pass on its share of the Opel shares to Russian automaker Gorkovsky Avtomobilny Zavod (GAZ). It's no great secret that the auto industry in Russia has failed to advance at the same rate as the rest of the world, and both the Russian federal government and Russian automakers like GAZ are keen to take their products into the, err... present. Taking advantage of Opel's technologies could be the winning ticket. In addition to the Opel stake, the deal also reportedly includes the purchase of GM's assembly plant in St. Petersburg for a princely $92 million.

[Source: Automotive News Europe - Sub. Req.]

Opel stake could give Russian automaker an injection of "know-how" originally appeared on Autoblog on Tue, 09 Jun 2009 06:58:00 EST. Please see our terms for use of feeds.

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