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”.
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