Wasn’t losing their precious intellectual property to the Rooskies the biggest beef GM had with the Opel-Magna-Sperbank deal? Wasn’t it clear that Sperbank wanted to sell its shares to GAZ? Wasn’t GM trying to block this deal by inserting a buyback clause? Now that GM has decided to keep Opel, those fears have evaporated. In the so far strangest twist in the Opel soap, GM is busy trying to salvage exactly the oddest part of the deal: The Opel-Magna-Sberbank-GAZ deal.
The DetN, the unofficial in-house organ of GM, reports (without flinching) that GM officials “still hope to negotiate an agreement with Magna and Russian automaker GAZ. A source familiar with the situation said GM has already contacted Sberbank.” Exactly. The same bank that is owned by oligarch Oleg Deripaska who had his US visa canceled amidst allegations of money laundering and organized crime. And who had to cut a deal with the FBI to be allowed back into the country. And who, according to the New York Times, “has repeatedly denied media reports that he had acquired a major stake in U.S. car maker GM.”
“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,” said GM Group Vice President John Smith, who was the chief negotiator of the Opel deal. Warren Browne, a former head of GM Russia, also is positive that GM can work something out with the Russians: “The end of the Opel deal does not preclude GM from continuing to help GAZ with Magna’s support.”
Surprisingly, everything is lovey-dovey between Magna and GM. They just started a mutual admiration society. “We’ll continue to support Opel and GM, and hope our business will continue to grow with them,” said Magna Co-Chief Executive Don Walker. In return, John Smith heaps praise on Magna: “Magna is among GM’s best suppliers. We like them. We continue to be their largest customer.” What a lovely couple.
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What in the wide wide world is going on here? It looks more and more like musical chairs, but with beds instead of chairs. And people jumping in and out of beds all the time. Is it a farce, or is it for real? Strange bedfellows, indeed…
Really, I can’t make sense of all this. There’s too much going on in closed boardrooms for any to count all the moves. Somebody has made a lot of deals behind closed doors, is all I can say.
Ingvar, what’s going on here is that there wasn’t (and still isn’t) enough government money on the table to make a deal work. The missing link is $billions from the Obama administration. Without a deal, GM gets stuck with the Opel turkey. GM’s rhetoric about keeping Opel was/is an effort to put a positive spin on this outcome. All the subsequent twists and turns are just indications that a deal is still possible if Washington ponys up the way the German government did.
A partial sale may be the best GM can hope for; the other players may not be willing to proceed unless GM/Washington stays roped in. This helps assure them that the river of US taxpayer money will keep flowing.
Magna the automaker never made sense. It was unreasonable to assume it could compete with its prime customers without losing a huge chunk of core business.
Perhaps Fritz Henderson is brighter than he looks. Could the Opel debacle have been a Machiavellian scheme for GM to get its U.S. and Canadian bailout ducks in a row, and hold onto Opel?
German Chancellor Merkel is in a box. When she gets over her snit, she either ponies up more money for Opel or risks 10,000 laid off, really pissed German autoworkers storming the Reichstag.
This has turned into a soap opera. Magna already had that kind of a feel. Frank Stronach’s daughter Belinda was married to co-CEO Don Walker, mentioned here.
Bob Lutz and Frank Stronach were both born in 1932, Lutz in Switzerland and Stronach in Austria. But Lutz was always the golden boy and Stronach, though rich now, had to claw his way up. Now their paths cross again.
At one point Oleg Deripaska owned a big chunk of Magna. The breakup and then makeup between him and Frank Stronach always seemed a little strange. Now it seems stranger.
What will the next episode bring?
“Magna the automaker never made sense. It was unreasonable to assume it could compete with its prime customers without losing a huge chunk of core business.”
I agree with that bit. Magna has been the lucky dog the car got away from twice now. First Chrysler, now Opel.
“Perhaps Fritz Henderson is brighter than he looks.”
I suspect the real decision makers were Ed Whitacre and perhaps a few other board members. The idea of giving Opel away to Magna and the Russians was a bad idea. Fritz doesn’t strike me as the kind of forceful leader to have turned that decision around by force of will. He seems more the well paid, eager to please master type of person.
@ Gardiner Westbound:
German Chancellor Merkel is in a box. When she gets over her snit, she either ponies up more money for Opel or risks 10,000 laid off, really pissed German autoworkers storming the Reichstag.
A.) It’s 25000 jobs at Opel.
B.) They are a drop in the bucket. Germany has 3.2m unemployed. By August 21.807 German companies had gone bankrupt. In 2010 4.25 million unemployed are expected. They don’t storm the Reichstag. They collect generous unemployment benefits.
I’m confused are they selling this or not?
This makes as much sense as marketing a car in North America (the Cruze) that you didn’t notice didn’t have an engine…
Or like promising to build a Zeta Sedan in North America and then only import a 9C1 car…
Or like selling the Ren Center and then turning around and buying it back, right before the real estate market crashed…
GM Management could screw up a sunny day at a park.
Magna has been the lucky dog the car got away from twice now. First Chrysler, now Opel.
Never heard it said so well, but very true. Just imagine where Magna would be right now if they had bought Chrysler. Not in the relatively good shape they enjoy now, for sure.
Frank Stronach has had some rough spots over the years. Magna really struggled just a few years ago. Hope their luck holds now, with the whole industry in crisis.
All the nice talk in public is there to cover up the fact that all involved are furiously trying to shiv each other in private.
These things always make sense if you look at them cynically.
This isn’t the same deal they were trying to negotiate with Opel and the German gov’t. This is a deal from 3 years ago, well before this latest Opel situation went nuclear. I am not sure of what they production deal they are trying to make is. It would be interesting to report more on that.