Supplier and sometimes-assembler Magna International will buy German transmission-maker Getrag for roughly $1.9 billion, the Detroit News is reporting.
The deal would firmly plant Canadian-based Magna International as the world’s second-largest parts supplier behind Robert Bosch GmbH and ahead of ZF, which recently purchased TRW Automotive for $12.4 billion earlier this year.
“The trend among the suppliers is that we now have to be bigger as the auto makers go to us to do more for them,” Magna Chief Executive Don Walker told the Wall Street Journal on Thursday.
Are you a short seller who is on the hunt for companies that are worse off than European carmakers? Look for parts makers that are also in the contract manufacturing business. OEMs may lose sales, but contract manufacturers lose whole contracts when manufacture is brought in-house by OEMs. Magna is likely to lose the contract with BMW to build the next generation of Mini cars, says Reuters. (Read More…)
For months, Frank Stronach’s Magna was about to take over GM’s Opel, until GM suddenly canceled the deal, a decision GM probably regrets several times a day. Used to reach for the stars, Frank Stronach reaches higher. Instead of ruling Opel, he now wants to rule a country. (Read More…)
These days, no Christmas cheer is complete without a little Opel jeer. Russia’s Sberbank has demanded compensation from GM for reneging on the Opel deal, Sberbank CEO German Gref said in an interview on Russia’s Vesti television channel. Groveled a grouchy Gref:
Last year, Porsche gave Magna an eight-year contract to build the Cayman and Boxster models from 2012 on. Then Porsche went to Volkswagen. Then Opel came. VW was miffed and said “us or Opel.” When Magna’s Opel deal went poof, VW said Magna can come home, all is forgiven. Apparently not quite. Volkswagen (or Porsche, hard to say these days…) want to use the factories of bankrupt Karmann which Volkswagen had bought and cancelled the contract. Magna cried foul and wanted money.
Now, the matter is official, writes Automobilwoche [sub].
Last year, Porsche gave Magna an eight-year contract to build the Cayman and Boxster models from 2012 on. Magna engineers immediately went to work and toiled with tricky tasks, such as the stiffening of the Boxter’s body. Which they say wasn’t, well, stiff enough. Then Porsche went to Volkswagen. Then Opel came and went. Finally, Volkswagen bought parts of bankrupt Karmann and needed to use the capacity. Cayman and Boxster will be built in Osnabrück, Instead of the Boxster body, Magna was stiffed and asked to pound sand.
Magna’s abortive attempt at buying Opel burned a few bridges for its supplier business, most notably drawing the ire of Volkswagen. But now that the deal is off, Magna has been forgiven by VW, and it seems even GM is ready to bury the hatchet. Reuters reports that GM has awarded the manufacture of their 3rd generation frames for full-size light-duty pickups and sport utility vehicles to Magna’s division Cosma International. “This is the third generation of frame business that we’ve been awarded by General Motors,” said Tracy Fuerst, a Magna spokeswoman. “To keep that business is certainly a win for us.” Curiously, the value of the contract wasn’t disclosed and no new jobs would be created but it sent the value of Magna’s share up by 1.9%. Life, and business go on… meanwhile, this is the first sign that GM is actively investing in a new generation of body-on-frame vehicles.
Magna and Sberbank want their money back. Everything they had so far invested into Opel needs to come back from GM, says Das Autohaus in Germany.” We are in negotiations with GM and we hope that we don’t have to go to court “, said Sberbank boss German Gref. “If all else fails, we’ll defend our position in a court of law.“ Gref did not name any sums. Magna also wants their money back. Magna’s Siegfried Wolf said “it is a considerable sum.”
The German government also wants to have their loan back before it will entertain any further discussions. The loan is due by end of November.
After scraping by owning Opel together with alleged Russian mobsters, Magna has given up aspirations of being a car company. Magna wants to “focus on its core competencies,” and will continue to be a supplier and contract manufacturer. This is what Magna’s Co-CEO Siegfried Wolf said to Germany’s Handelsblatt.
Magna’s cozying-up with GM continues. “We have contracts from GM, and there is no reason why we should not get new ones,” Wolf said. Then, the ultimate brown-nosing is perpetrated:
Russian oligarch Oleg Deripaska meets with Fritz Henderson, German Gref of Russia’s Sberbank and Siegfried Wolf of Magna. The state department had previously denied Deripaska a US visa for undisclosed reasons, but according to the WSJ, the FBI arranged for Deripaska to visit the US because “they were getting interesting information from him.” Deripaska denies any cooperation with US authorities.