GM flip-flops its Opel-Magna deal

Vauxhall Insignia
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.”

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Paul Tan

After dabbling for years in the IT industry, Paul Tan initially began this site as a general blog covering various topics of personal interest. With an increasing number of readers paying rapt attention to the motoring stories, one thing led to another and the rest, as they say, is history.

 

Comments

  • kimi_ on Nov 09, 2009 at 12:07 pm

    FIRST….Learned from BN…

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  • mystvearn on Nov 09, 2009 at 12:20 pm

    GM did not really wanted to sell Opel. Thats why they took forever to sell this car maker. Opel and Vauxhall is important for GM in Europe. If sell, then where else GM want to source cars for its European base

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  • If they don't want to sell, then the US taxpayer will have to pay the restructuring costs of 4.5 billion EURO.

    GM is now a company owned by the US government and I doubt that the European governments will help them…

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  • common sensor on Nov 09, 2009 at 3:53 pm

    GM was infected with the flip-flop disease from the Malaysian ..

    Like or Dislike: Thumb up 0 Thumb down 0
  • azrai on Nov 09, 2009 at 4:05 pm

    Yes, the flip flop disease starting from Pak lah.

    Like or Dislike: Thumb up 0 Thumb down 0
  • JULIAN_LEE on Nov 09, 2009 at 4:36 pm

    fuck you azLAI and no common sensor

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  • oricon666 on Nov 09, 2009 at 5:44 pm

    lolx…!!!

    I though Pak Lah & his family (you know who) only got involve in Oil-for-Food Programme/scandal at global stage..
    http://en.wikipedia.org/wiki/Oil-for-Food_Program…

    his claw reach out to GM also ah..??

    Woow… betul-betul boleh'land

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  • Pi mai pi mai tang tu.

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  • Mazda 3 MPS on Nov 10, 2009 at 2:43 am

    pls don sell it to some stupid indian or chinese or malay

    Like or Dislike: Thumb up 0 Thumb down 1
  • ngyahloon on Nov 10, 2009 at 5:37 am

    At least the british are happy: http://www.independent.co.uk/news/business/news/g…

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  • MADBOY on Nov 11, 2009 at 2:49 am

    What happen was GM asked for opinion from Proton on how to turn around Opel. Proton advice was to negotiate until the final part and then make about turn by submitting a new business plan to Obama. lol

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  • Fabregas on Nov 25, 2009 at 7:59 pm

    GM is backed by US Gov. and US Gov is monopolised by the american jewish. So f**k these jewish millionaire/billionaire.

    Btw, what a genius idea from them to get a loan granted by european bank. LOL.

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