Welcome to another chapter in the strange world once called GM Europe. Within a week the deal for Opel with Magna International and their Russian partners seems on the rocks. Saab is waiting for a loan from the European Investment Bank and is seeing production slow in comparison to orders.
GM has rankled negotiations by insisting on a buyback clause which is strongly opposed by the government of Hesse the state in which Opel is headquartered. Roland Koch prime minister of Hesse has backed Magna’s bid. Sources say that Sberbank and Magna may withdraw their bid due to General Motors latest demands. GM has raised the price of Opel. GM is looking for an investment of 7 billion euros in Opel which is 14 times greater than the Sberbank initially offered.
GM is now looking to sign a non-binding agreement with Belgian holding company RHJ International and Beijing Automotive as a second option should the deal with Magna and partners fail.
Some of the sticking points on the Magna deal are:
- GM is concerned that Magna is planning significant changes in engineering and design which would eliminate parts sharing with other GM cars.
- GM is pertubed by Magna’s Russian partners. GM is worried that they will use Opel’s designs to help improve the Russian car industry.
Fiat also doesn’t seem out of the picture. Following a meeting with Fiat CEO Segio Marchionne, Italian prime minister Silvio Berlusconi told reporters the Fiat deal is “still on the table”.
Meanwhile Saab has been dealing with their own problems. Saab needs a cash infusion to get production up and running to meet the demand for orders. They are attempting to spped up a 4.6 billion kronor ($600 million) loan from the European Investment Bank (EIB).
The worry is that they may have to wait until September 22nd following the EIB’s next scheduled meeting in August. Saab chief Jan Åke Jonsson told the Göteborgs- Posten “We’re working with the EIB to see if we can move the decision to July. We haven’t ruled it out. If it doesn’t happen, we have the ability to adjust our operations so that our money lasts,“.
Currently the main plant in Trollhättan is producing a mere 100 cars a day. Without the cash infusion, production is likely to stay there.
The Swedish government is also a player in the negotiations between Saab and the EIB. Sweden is required by the bank to guarantee the loan. Saab is currently in talks with Sweden’s Riksgälden (National Debt Office) regarding the terms of the guarantee.
Stay tuned. General Motors and its European marques are sure to give investors and auto enthusiasts plenty of press this summer.
Source GP : Better read Swedish if you follow this link!
{ 2 comments… read them below or add one }
“a non-binding agreement”???
Isnt that the same as saying it’s not worth the paper it’s written on?
Pretty much!