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NINETY EIGHT REGENCY

GM seeking Russian production deal with Magna, GAZ

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GM seeking Russian production deal with Magna, GAZ

11/09/2009, 8:58 AMBY ANDREW GANZ

General Motors and Magna International aren’t exactly on the best terms now that the Detroit automaker has changed its mind about selling its German unit, Opel, to the Canadian supplier. But that’s not stopping GM from seeking a new, much smaller deal that would see it tying up with Magna and GAZ to produce cars in Russia.

“I see us being able to pick up with Magna and GAZ and continue to try to develop this business – but obviously now as part of a GM-retained Opel, not as part of a Magna-Sberbank consortium,” GM Group Vice President John Smith, who served as a chief negotiator in the failed Opel deal, told the media.

An unnamed source told the Detroit News that GM had already contacted Sberbank, the Russian bank that had been tapped to provide key financing for Magna’s planned acquisition of Opel.

It’s not the first time that GM, GAZ and Magna have discussed a three-way production deal; the Detroit automaker was deep into negotiations with GAZ owner Oleg Deripaska three years ago when the Russian ran into financial hurdles that prevented the project from taking flight. GAZ, an historic industrial force in Russia, is best known for producing military vehicles and some consumer vehicles under the Volga name. Its freshest product is the Volga Siber, which is essentially a rebadged previous-generation Chrysler Sebring sedan.

GM isn’t exactly revered in Russia or Europe after its abrupt decision last week, which could lead to troubles for the plan from the get-go.

Russian Prime Minister Vladimir Putin, not one traditionally shy about speaking his opinion, said, “GM didn’t discuss anything with anyone.”

“It doesn’t hurt our interests, but it speaks of a peculiar culture of communication of American business with its business partners,” Putin said. “This arrogant attitude is directed first and foremost at the Europeans rather than at us

link:

http://www.leftlanenews.com/gm-seeking-rus...-magna-gaz.html

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