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VW wins EU approval for Karmann purchase

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VW wins EU approval for Karmann purchase

David Jolley November 30, 2010 09:31 CET

Volkswagen AG has been given approval by the European Union for its planned purchase of various auto businesses belonging to bankrupt German company Wilhelm Karmann GmbH.

The deal will give VW control of Karmann's divisions for car and components development, contract manufacturing, plant engineering and the development and production of equipment and tools.

"Given the presence of other considerable suppliers and the moderate market share of Karmann, the Commission concluded that car manufacturers will continue to have sufficient alternative suppliers after the transaction," the European Commission, the EU competition watchdog, said in a statement.

Karmann filed for bankruptcy protection last year after new orders dried up. The coachbuilder and roofspecialist is most famous for building the VW Beetle-based coupe dubbed the Karmann Ghia.

VW has already outlined plans to begin producing cars at Karmann's factory in Osnabrueck in VW's home state of Lower Saxony.

The company has said it will begin production of a Golf convertible in the spring of next year, creating a total of 1,800 jobs by the end of 2011.

During a tour of the facility last month, VW CEO Martin Winterkorn praised the specialist skills of the former Karmann work force.

"Over the decades, some of the most beautiful models in the automobile world have left the assembly line in Osnabrueck. We will be carrying on this tradition from 2011 with the new Golf Cabrio," he said.

Karmann developed the retractable hardtop roof first introduced with the Mercedes-Benz SLK. The idea was later copied by competitors, finding widespread use in popular volume models such as the Peugeot 207 CC, but in recent years, a trend among automakers to reduce the outsourcing of roof contracts and vehicle assembly weighed on Karmann's order book.

After delivering its last Mercedes CLK in June 2009, Karmann's coachbuiding business was left without work.

As part of its company's restructuring, Valmet won control of Karmann's roof-making operations in Osnabrueck and Zary, Poland.

Meanwhile, Canadian supplier Magna International Inc. took control of Karmann's roof business in Japan while Germany's Webasto AG took control of Karmann's U.S. roof business and a factory in Mexico.

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20101130/ANE/311309993/1193#ixzz16mVFcMOD

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