VW To Magna: "Us Or Opel"

Bertel Schmitt
by Bertel Schmitt

It has been commented widely (and it doesn’t take a tall IQ to do so) that Magna might get problems with its parts customers (a.k.a. OEMs) when Magna starts competing with them through Opel. Didn’t take long: “Volkswagen AG said Wednesday Canadian auto parts supplier Magna International Inc. will face conflicts of interest following the planned takeover of General Motors Corp.’s (GM) Adam Opel GmbH unit,” Dow Jones Newswire reports from Germany. The threats are carefully worded:


According to VeeDub’s spokesperson Michael Brendel, “Volkswagen will monitor this development very closely.” Translation: Volkswagen Purchasing is talking to other bidders.

Volkswagen is a direct rival of Opel. Volkswagen is also a major customer of Magna. Magna also supplies components to Porsche, Volkswagen’s largest shareholder. Conflict of interest? Looks like it.

Large parts suppliers enjoy a tight relationship with auto makers. They often are embedded in the development process of a new car. If you want to know in detail what a auto maker plans for five years down the road, become one of their components suppliers. You will work with them, and they will work with you. Unless you also own a direct competitor like Opel. If you do that, your mugshot will be posted at Wache Sandkamp, the main entrance to Volkswagen’s HQ in Wolfsburg.

Volkswagen has another beef: “Tax money has been used to a large extent for Opel’s rescue.” Volkswagen would have rather seen Opel dead. Being propped up with tax money, AND run by one of their suppliers is a bit much for them to swallow. Other makers most likely see it the same way as Volkswagen.

Magna will have to decide: Auto maker or parts maker. I’d choose the latter.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Kurt. Kurt. on Jun 05, 2009

    Agree with psarhjinian, All the automakers are tied up with each other anyway. The parts suppliers sell to multiple makers. The makers buy from each other (Routan ring a bell?). This is just political posturing.

  • Bimmer Bimmer on Jun 05, 2009
    psarhjinian and charly, it's not Serbank, it's Sberbank. And why would you add shares of Magna (with Canadian owner) to Sberbank (Russian government owned)? I don't see any logic in it.
  • EBFlex China can F right off.
  • MrIcky And tbh, this is why I don't mind a little subsidization of our battery industry. If the American or at least free trade companies don't get some sort of good start, they'll never be able to float long enough to become competitive.
  • SCE to AUX Does the WTO have any teeth? Seems like countries just flail it at each other like a soft rubber stick for internal political purposes.
  • Peter You know we’ve entered the age of self driving vehicles When KIAs go from being stolen to rolling away by themselves.
  • Analoggrotto TTAC is full of drug addicts with short memories. Just beside this article is another very beautiful article about how the EV9 was internationally voted by a renowned board of automotive experts who are no doubt highly educated, wealthy and affluent; the best vehicle in entire world. That's planet earth for you numbskulls. Let me repeat: the best vehicle in the world is the Kia EV9. Voted, and sealed, and if you try to deny it Fanny Willis is ready to prosecute you; but she will send her boyfriend instead because she is busy.
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