Vauxhall/Opel Insignia, voted 2009 Car of the Year (Europe)
GM must have caught the flip flop disease from somewhere as it has at the last minute turned back on its decision to sell Opel to a Russian-backed group led by auto parts supplier Magna International, which took months and months of negotiation so far.
The deal was looking to be pretty much set in stone and Magna’s existing clientele had expressed unhappiness over a supplier suddenly becoming a competitor as well. Magna’s client list includes Volkswagen, GM, Ford, Chrysler, Daimler and BMW amongst others. Volkswagen had threatened to pull the plug on Magna’s VW group supply contracts if the Opel deal went through but it looks like now there would not be such a conflict.
Now because of “an improving business environment and the importance of its GM Europe divisions to its global strategy”, it has decided to turn back on its offer to sell. It would instead restructure its Opel division on its own, at a cost of 3 billion Euros. Where this money will come from is a big question now, as it most likely will not be able to rely on promises of financing that European governments had promised earlier.
European governments had granted financing from state banks in view that Opel would be in Magna’s ‘safer’ hands, and are now pretty pissed off that GM had pulled the old classic bait and switch tactic on them. Obviously the financing were granted assuming Opel would be in Magna’s hands soon. Germany’s government said it wanted GM to repay 1.5 billion Euro in bridge financing by the end of this month. Germany had offered a total of 4.5 billion euros in financial aid for the Magna deal. Opel workers are also pissed off as in their view now their jobs are less secure and held a protest, carrying black coffins with GM and Opel logos on them.
GM Europe president and ex-BMW man Carl-Peter Forster immediately left the company Friday last week after the announcement of the sale flip-flop. “A sudden shift like this is scarcely comprehensible. I do not find the process in any way okay. I would have wished for a completely different result,” said Forster. He clearly did not want to be any part of an Opel that remained under GM rule, and apparently he has already been offered a job with Tata-owned Jaguar Land Rover.
Magna had nothing else to say but this – “We will continue to support Opel and GM in the challenges ahead and wish to thank everyone who supported the Opel restructuring process for their tireless efforts and dedication over the past several months.”