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VW sales boss warns Magna over Opel takeover

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VW sales boss warns Magna over Opel takeover

PAUL MCVEIGH

AUTOMOTIVE NEWS EUROPE

SEPTEMBER 18, 2009 11:08 CET

MUNICH -- Volkswagen will withdraw business from Magna International Inc. if the supplier takes over Opel with Russian partner Sberbank, Detlef Wittig, Volkswagen's head of sales and marketing, said.

"If they really do go through with it, then we will withdraw business from Magna in which our development know-how is included," Wittig said.

"We cannot leave our know-how in the hands of a supplier that then uses this in his own automobile company," Wittig told reporters on the sidelines of an event in Hamburg.

Volkswagen AG Chairman Ferdinand Piech has said he would not like to see one of the company's major suppliers become a competitor.

General Motors Co. agreed last week to sell Magna and its partner, state-controlled Russian lender Sberbank, a 55 percent stake in Opel in a deal that all parties aim to finalize by the end of November.

Magna, which will have operational control of Opel, says it will run its supplier and auto businesses separately with firewalls between the two. But automakers are worried that Opel could gain access to their technology.

BMW's head of production Frank-Peter Arndt said last week it generally was a problem when a supplier became a competitor.

"If we saw a conflict of interest we would react," Arndt, told the Frankfurter Allgemeine Zeitung.

BMW is Magna's second-biggest customer after GM.

Ford OK with the deal

Ford Motor Co. has said it intends to continue working with Magna but the carmaker will work closely with the supplier to make sure the automaker's intellectual property is protected.

Ford Chief Financial Officer Lewis Booth said Magna is a "very good supplier" and important to Ford. "They've given us assurances they're going to separate their businesses and make sure there's a good firewall between their new acquisition and their traditional supplier business," Booth told analysts at an event in Frankfurt.

Magna Co-CEO Siegfried Wolf said the supplier will protect its customer technologies. “Magna will not be Opel. The supplier business will be strictly separated from the Opel engagement,” Wolf said at an industry event in Vienna on Wednesday.

Magna ranks No. 4 on the Automotive News Europe list of the top 100 global suppliers, with sales to automakers of about $23.3 billion in 2008.

Reuters contributed to this report

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Or perhaps Vee Dub is worried that a Magna run Opel with a substantial GM stake could end up giving them one hell of a fight in the future?\

What's to steal from VW, anyways? Lousy electronic components?

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Or perhaps Vee Dub is worried that a Magna run Opel with a substantial GM stake could end up giving them one hell of a fight in the future?\

What's to steal from VW, anyways? Lousy electronic components?

That, and the secret of building quality interiors consistently.

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So now Magna has BMW and VW unhappy with the deal?

The automotive value chain is a very fragile one: dealers are squeezed left and right, OEMs are squeezed left and right, suppliers (even Tier 1 suppliers like Magna) are squeezed left and right... Does taking on Opel really outweigh the cost of their large customers looking for other suppliers and automotive system developers?...

Edited by ZL-1
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ford's approach here is the right one. they can benefit as much from sharing the technology as it stands to gain.

most tech improvements these days come from engine and suspension component suppliers. bosch, for example. so to suggest that magna is a wealth of technology i think is stretching it. As long as the companies invest the development money into these areas of the car, they will not fall behind. always innovate.

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