The War of Nerves Around Opel

article50-1It seems that buying Opel by the Canadian-Austrian manufacturer of automotive components Magna – is a case that is resolved. However, the ongoing negotiations between Magna and the parent corporation of  Opel – General Motors (GM) – is increasingly becoming a war of nerves.

Thus, an information has been released from the depths of GM that the American company intends to sign a statement of intentions, which does not require any obligations with the Chinese car manufacturer company BAIC, and also with financial investor RHJ. There is no doubt that its goal is to increase the pressure on Magna in order to secure new assignments. For example, GM has started talking again about one desirable option, which is the possibility of buy-back of Opel, a variant that is accepted neither by Magna, nor by the German authorities. Those who are familiar with the situation at GM – Handelsblatt sources claim that the top leadership of the General Motors cherishes the hope that after the bankruptcy of GM it can restore its former strength, and may again purchase back Opel.

In his turn, the head of the Savings Bank (Magna partner in the transaction) German Gref said on Friday at a meeting of shareholders of the Bank that if General Motors made the new terms of the transaction of Opel acceptable for the Bank, then by the most optimistic scenario, the transaction may be concluded in September 2009. According to him, intensive consultations are currently undergoing with the shareholders fo the auto concern, and an agreement of purchase between Sberbank and the owners of Opel may be concluded in July this year. Meanwhile, Magna, according to the sources of the German media, said the purchase of Opel with the new requirements of GM would not be possible.

Absolute certainty that the transaction between Magna – Opel will take place, does not exist also in the Ministry of Economy of Germany. It is no coincidence that the head of the board of trustees for the trust management of Opel Fred Irwin pointed out in an interview with Handelsblatt that the statement of intent signed between Magna and General Motors is not legally binding and does not oblige to anything, and that new applicants for the purchase of Opel were welcome.

China Germany Opel

Thus, some extra time is needed in the tugging for Opel. The Chinese delegation from BAIC is continuing intensive study of financial records of the German carmaker in its headquarters in Ryusselshayme and active talks are taking place with the managers of Opel. What may spur them is that another Chinese company – Sichuan Tengzhong Heavy Industrial Machinery Co., may abandon the purchase of brand Hummer from General Motors because of the dissatisfaction of the regulatory authorities of China with the deal, because Beijing is pursuing a policy aimed at reducing energy consumption and manufacturing low-cost, economical cars.

Yet much says in favor of the fact that in the end the choice will be made all the same in favor of Magna, in fact negotiations with the Canadian-Austrian corporation are in a much more advanced stage compared to those with other competitors. Yes, and GM understands that, because of the difficult economic situation of Opel the time to negotiate of the Americans is not unlimited.

The point is that the German government interim loan that is given to Opel, which has millions of dollars in losses every day, will only last until the autumn, insiders believe. And the political apex of Germany is seeking to make a final decision on the Opel before 27 September, that is, before the German parliamentary elections.

The War of Nerves Around Opel
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