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

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

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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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Interesting...maybe GM doesn't want Opel tied up with the corrupt Russian government and their banks, which have deep ties with OC (Russian Mafiya). It's best to keep that scum out of the picture.

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If RHJ (I think I got the initials right?) provides a way for GM to get Opel back in a few years, then I think that's the route GM should go. It would be a shame to see GM lose access to Opel and what looks to be some awesome future products that the brand has in development.

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according to insiders across the web, the snag is Opel and GM's massive involvement together in developing future technologies, including Volt dev, future platforms, future battery tech. these are important properties which GM has spent massive amounts of money to build, and should be treated as investments. if there is a way for opel to enter BK, I'd prefer they go that route, and not lose any of the market presence the Opel brand represents or the intellectual properties. It's possible GM may be holding things up for exactly that reason. then again it's possible they're trying to come up with the exact right parameters for a deal with RHJ.

in the blog referenced above, the GM employee stated matter of factly Magna had violated the terms of the memorandum of agreement signed months ago before the BK that placed Opel in a trust. By promising Russian investors access to the popular Chevy brand in Russia and Opel and GM's technologies, they promised more than the deal was to include. As the protector of future investments, GM is doing absolutely the right thing by denying Magna's offer. what they did was coercive and sneaky.

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