GM to Sell Opel To Magna (With Conditions)

Bertel Schmitt
by Bertel Schmitt
Germany’s Chancellor Angela Merkel herself has confirmed that GM is ready to sell Opel to Magna. The offer comes with yet to be disclosed conditions. However, according to news-adhoc, Frau Merkel “doesn’t have the impression that behind the announcement of Opel is a hidden agenda that sets the threshold so high that in the end there won’t be a sale.” This is politico-speak for: “Do we smell a rat here?” Das Handelsblatt has more details. Magna/Sberbank will take over 55 percent of Opel, GM will retain 35 percent and the workers will hold a 10 percent share. Opel will “remain integrated in the worldwide development network of GM.” On the list of open issues: A written confirmation of the workers that they “will support the necessary cost adjustments” (i.e., take expensive haircuts) and a definitive financing package by the German government.The Opel Trust also approved the deal, says Interesting: The Opel Trust holds Opel as security for the €1.5 billion bridge loan. The board of the trust had to vote. Manager Magazin writes that there was one vote against: By the representative of the German government, Manfred Wennemer. He thinks Opel’s costs are too high, their Russian goals unreachable. Thumbs down. Also interesting: The representatives of the states, where Opel has factories, abstained. The deal was approved with the votes of the GM representatives on the board. As for factories, all German factories will be kept open.The factory in Antwerp will be shuttered. In the UK, “Magna said it was committed to keeping Vauxhall’s Ellesmere Port plant open,” says the BBC. “Doubts remain about the firm’s Luton plant.”According to Das Handelsblatt, GM “played poker until the end.” In the end, GM realized that they don’t have the money to hold on to Opel. Yet, the deal is still far from closed. Das Handelsblatt heard from governmental sources: “Whether Magna can live with GM’s conditions won’t be decided before the election date. After that, we will see.”
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=""> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href=""> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

More by Bertel Schmitt

Join the conversation
2 of 9 comments
  • Dave Dave on Sep 10, 2009

    Will Magna now have to up the pay of their existing employees to match that of Opels people? If they do they become uncompetitive with Lear etc (look whats happened to Delphi and Visteon). If not, how will the unions react? and I can't believe that the workers in Opel/Vauxhall will willingly take a cut to supplier pay levels. Magna have an interesting time ahead of them. rationalise GM-Europe, keep all the unions happy and don't p&ss off their OEM customers while building competitive vehicles...... I admire their ambition. I agree with psarhjinian - VW (and Ford, PSA, Fiat etc) want Opel gone

  • Psarhjinian Psarhjinian on Sep 10, 2009
    I don’t see the similarities. Aisin and Denso are keirestu and Delco/Visteon are spin offs. The big difference is that none of them ever produced a single competing vehicle. Toyota effectively controls Aisin. Aisin sells transmissions to everybody. Denso is the same, but they sell to everyone. Delphi (sorry, not Delco--my bad) was effectively controlled by GM. Delphi sells all sorts of shit to everybody. Magna has a stake in (not controls, has a stake in) Opel. Magna sells all sorts of shit to everybody. Functionally, there's not a lot of difference there. Toyota damn well competes with a lot of the companies who buy Aisin transmissions. Those same companies are bankrolling Toyota by buying Aisin and don't seem to care. Magna/Opel aren't really different in that sense. The only reason there might be blowback is that some people (read: Volkswagen) want Opel dead, dead, dead. VW stands (stood?) to gain from Opel's collapse. An extant, if not revitalized, Opel doesn't help a lot of companies, but it's VW who would likely benefit most from the dead cat bounce. It would give them the breathing room they need to stay abreast of Toyota, Ford and the like in Europe.
  • ToolGuy Torque to Pork Ratio™ (torquelages/curb weight) ain't looking amazing.
  • FreedMike I had no idea the 500X was even being sold here anymore.
  • FreedMike The company logo needs to be bigger on the tailgate - it can't be deciphered easily from Pluto.
  • ToolGuy On a not-long drive last night to the next county over, my spouse grilled me about Rivian and Rivian products. So congratulations, Rivian, you are officially on the Non-Enthusiast Radar.
  • Cprescott My 2016 Hyundai that I bought in January 2019 cost $13k and takes less than 10 minutes to fuel and gets over 500 miles to a tank - lifetime average MPG of 45. Golf carts make no sense at all.