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GM Considering Plan To Keep Opel

 
7 5,824 views Aug 25, 2009
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GAZ Group is Russia's largest automaker and is responsible for a range of cars, trucks, buses and powertrain assemblies

GAZ Group is Russia's largest automaker and is responsible for a range of cars, trucks, buses and powertrain assemblies

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General Motors CEO Fritz Henderson has previously stated that a new buyer for Opel would be picked this year and that at least three different companies were still in the bidding. Those three companies included auto parts supplier Magna International, private equity group Ripplewood Holdings and Chinese automaker Beijing Automobile Co. (BAIC), however, late last month reports emerged claiming the German government and GM had failed to agree on a buyer though Magna is said to be the leading contender.

Now it appears that GM has a backup plan to keep Opel all for itself. Latest reports indicate that GM is considering a plan to raise funding to keep Opel as an alternative to selling the unit. At a board meeting last Friday, GM directors declined to endorse a sale of Opel to Magna, sending the automaker back into negotiations this week with the German government.

A person familiar with Magna’s plans previously revealed that the parts supplier had increased its bid for Opel, from the original 20% stake it envisioned, to 27.5%. Under the new plan, Magna and Sberbank, Magna's Russian partner, would own 55% of Opel--27.5% each--while the remaining 35% would go to GM and 10% would go to Opel employees.

However, while GM remains focused now on trying to clear remaining issues with the Magna deal, executives also are considering other options, including raising more than $4 billion in a bid to keep Opel, sources said. To raise the necessary funds, GM could potentially sell or mortgage its assets in China.

In the meantime, the German government is providing Opel with bridge loans to stay afloat while the bids continue to be studied. GM has also asked Germany for financial assistance for the brand.

[Reuters]





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Comments (7)

  1. ma_NoNameDenton avatar NoNameDenton Posted: 4/18/2009 4:16pm PDT

    Didn't they already try getting along once and fail at it?
     
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  2. ma_Damien Thomas avatar Damien Thomas Posted: 4/18/2009 7:31pm PDT

    Yes they did. But back then GM was in the stronger position and Fiat was struggling. How the tides have turned...
     
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  3. ma_54chevyman avatar 54chevyman Posted: 5/1/2009 6:39am PDT

    This could work causing a 3 way alliance between Fiat GM and Opel benefiting Chrysler in the process. Let's face it we all have to form a pact to compete with the worlds best small cars and share technology! The future is now and the alliance will give them all the strength to innovate into other forms of low carbon transportation! This is getting good!
     
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  4. ma_taksan avatar taksan Posted: 5/1/2009 7:48am PDT

    this will be interesting
     
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  5. ma_NoNameDenton avatar NoNameDenton Posted: 5/1/2009 10:44am PDT

    Geez, Fiat is on a buying spree, almost reminds me of Ford years back when they bought up all those luxury brands they sold off recently.
     
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  6. By Pete Dene Posted: 8/25/2009 10:23am PDT

    It seems GM wants to have it's cake and eat it. They want to sell to a finance group in order to buy it back when times are better. They want the German government to pay them to keep going. Not surprisingly the German government and trade unions are not keenon this. They want GM sold off to Magna, which is an established manufacturer with engineering expertise, not a flighty fginance group. We all know the mess those organisations have made - that's what we're all suffering from now! GM included. I think GM and the Germans made a mistake when they didn't go with the Fiat bid.
     
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  7. By secrummy Posted: 8/25/2009 2:54pm PDT

    GM should really try and keep Opel in the fold. All of GM's best engineering over the past decade has come from either Opel or Saab. Without those two companies what little innovation there currently is at GM will cease, and taxpayers will continue to have to supply GM with barrels money to keep them on life support.
     
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