Sign in to follow this  
Followers 0
NINETY EIGHT REGENCY

GM hits the brakes on Opel deal; no signing with Magna this week Automaker's board to discuss sale to Magna on Nov. 3

7 posts in this topic

GM hits the brakes on Opel deal; no signing with Magna this week

Automaker's board to discuss sale to Magna on Nov. 3

OCTOBER 23, 2009 14:01 CET

UPDATED: OCT. 23 14:30 CET

FRANKFURT (Reuters) -- General Motors Co. put on hold a deal to sell a 55 percent stake in carmaker Opel to a Russian-backed consortium led by Canadian auto parts group Magna International Inc., GM's chief negotiator on the deal said on Friday.

No sale can proceed until the U.S. carmaker's board of directors discusses the Opel deal at a meeting on Nov. 3, chief negotiator John Smith said in a blog entry, pouring cold water on hopes that the sale contract could be signed this week.

"Given the significance of the Opel transaction, GM's board will soon meet in its regularly monthly meeting to consider Minister zu Guttenberg's letter and changes to the Magna/Sberbank proposal that have occurred since its last review on September 9," Smith said in the blog.

He was referring to German Economy Minister Karl-Theodor zu Guttenberg's request to GM -- prompted by European Union concerns about promises of German state aid -- to confirm that the carmaker chose Magna for business and not political reasons.

In the meantime, the company would work to resolve remaining open points with the Magna/Sberbank proposal, including labor cost reductions and a plan to obtain 4.5 billion euros ($6.8 billion) in aid sought from states with Opel plants, Smith said.

Reduced number of job cuts

Opel's workers -- who face about 10,000 job cuts under the new owners from 50,000 now -- are supposed to get a 10 percent stake in the new company in return for labor cost concessions, while GM will keep a 35 percent stake.

GM decided last month to sell a majority stake to Magna and its Russian partner Sberbank.

Opel's buyers originally intended to eliminate about 10,500 jobs in Europe, including about 4,000 in Germany, but talks with labor have resulted in promises to cut fewer jobs.

Workers in Spain are due to vote on a preliminary deal that would keep a plant there open at the cost of 900 jobs -- instead of up to 1,650.

U.K.-based union Unite has already reached an agreement with Magna that would preserve two Vauxhall production plants and rescue 600 of the jobs that were slated to go. Vauxhall employs about 5,500 people.

Magna and the Russian bank have vowed to inject 500 million euros into Opel, aiming to use it to make an aggressive push into the Russian market.

The European Commission is keeping a close eye on the transaction to ensure state aid is not misused for political purposes.

It has pressured Berlin into making assurances that the state aid it envisages was available to any buyer, not just its preferred buyer, Magna. The supplier has proposed keeping all four Opel plants in Germany open.

0

Share this post


Link to post
Share on other sites

Magna agrees to reduce job cuts at Opel factory in Spain

OCTOBER 23, 2009 06:01 CET

UPDATED: OCT 23 00:05 CET

MADRID (Reuters) -- Spanish unions have reached an initial agreement with Magna International Inc. over job cuts at Opel's Zaragoza plant, the leading trade union groups UGT and CCOO said on Thursday.

The move clears one of the last obstacles in the way of a deal between Magna and its Russian partner, Sberbank, which last month struck a preliminary deal to buy a controlling 55 percent stake in Opel from General Motors Co.

Following a meeting between Magna, the unions and central and regional government representatives, the Canadian company has agreed to keep the plant intact until the summer of 2011.

"We have reached agreement in principal over an industrial plan for the plant that guarantees production capacity and planned job cuts are less traumatic than initially announced," a spokesman for UGT said.

The planned job cuts at the plant will be reduced to a maximum of 900 from an original between 1,300 and 1,650, the unions said in a statement.

Strikes planned

But unions from the plant will maintain their plans for four one-day strikes until the agreement with Magna has been ratified by members. The strikes are due to take place on Oct. 28, Oct. 30, Nov. 3 and Nov. 5.

The unions have called a meeting with Opel workers for Monday, when the plan will be presented and studied.

Zaragoza is Opel's biggest plant. Last year it built 423,011 units of the Corsa subcompact, Meriva minivan and Combo car-derived van.

The Spanish unions also said that Magna had guaranteed that any offshoots of the Corsa, like the Tigra, would be manufactured there.

Magna had proposed big production cuts at Zaragoza including transferring some production to Germany as part of its plan to cut about 10,500 of the 50,000 jobs at Opel plants across Europe.

GM CEO Fritz Henderson told CNBC on Wednesday that the signing of the Opel deal -- which has been delayed by last minute negotiations over jobs and competition concerns voiced by European Union regulators -- could take place as soon as this week if outstanding issues were resolved.

The head of the Opel Trust, which was set up to stop Opel being dragged into GM's brief dip into bankruptcy, also urged a quick conclusion to the deal in comments on German radio earlier this week.

A European Commission spokesman said earlier this week that antitrust regulators have no plans to block the deal.

0

Share this post


Link to post
Share on other sites

They may have reached an agreement with Magna, but until the deal is signed Magna does not own Opel.

:deathwatch:

0

Share this post


Link to post
Share on other sites
My position has evolved. I hope they can keep Opel.
0

Share this post


Link to post
Share on other sites

GM needs a European presence and credibility to remain strong. There is no way to do that with NA or Korean products.

GM as a whole loses a lot of value in their vehicle development operations without arguably the most technologically savvy arm at work for them.

When all is said and done it is to GM's benefit to retain the Opel arm.

If GM loses Opel, then it is fair to say that Buick in the US is not far behind as well. Buick in the US cannot survive on Korean cars, as it might be able to in the next decade in China.

Losing Hummer is prob no big deal. Pontiac stung. Saturn is now a who cares deal. But Opel can fill the need for certain vehicles that the folks in detroit don't want to design.

0

Share this post


Link to post
Share on other sites

Good. Opel is making the GM vehicles that I actually would buy. The Daewoolets might technically be decent, but they're generic and boring. And I'm not in the market for an SUV, truck, or sports car.

It's a shame I have to get one with a Buick badge. If they try to give Astra fake wood, ventiports, and chrome wheels, I'll pass...

Edited by pow
0

Share this post


Link to post
Share on other sites

Your content will need to be approved by a moderator

Guest
You are commenting as a guest. If you have an account, please sign in.
Reply to this topic...

×   You have pasted content with formatting.   Remove formatting

×   Your link has been automatically embedded.   Display as a link instead

Loading...
Sign in to follow this  
Followers 0