ZURICH, Switzerland — General Motors ended months of rumors and speculation on Thursday morning with confirmation that it will sell a 55 percent stake in its Opel brand to Magna and its Russian banking partner Sberbank. However, it emphasized that it will not completely sever ties with Opel.
"GM will continue to closely collaborate with Opel and Vauxhall to develop and produce more great cars, such as the new Insignia and the new Astra," said GM President and CEO Fritz Henderson in a statement.
The tie-in with Opel is critical, since it has been a linchpin for GM's vehicle lineup, especially the push to get more fuel-efficient vehicles into the hands of U.S. consumers. The Chevrolet Cruze, for instance, is built on an Opel-developed platform.
The automaker, which is in the process of spinning off Saturn, Hummer and Saab, characterized the Opel deal as a "fresh start" for the German brand.
There is fear, however, that the involvement of Russian state lender Sberbank in the Opel deal may mean that GM could lose ground in the burgeoning Russian auto market. It was widely reported in late August that GM advisors recommended to the board that it spurn a Germany-backed sale of Opel to keep a stronger presence in Europe and Russia. There was great pressure on GM from the German government to sell to Magna, since about 25,000 jobs in Germany depend on Opel.
GM said, "Several key issues will be finalized over the next few weeks to secure the binding agreements," including "the finalization of a definitive financing package from the German government." The deal is expected to close by the end of the year. When finalized, Magna/Sberbank will purchase a 55 percent stake in "New Opel," while GM will hold a 35 percent stake and Opel employees will hold a 10 percent stake.
"The agreement will keep Opel/Vauxhall a fully integrated part of GM's global product development organization," GM said in a statement, "allowing all parties to benefit from the exchange of technology and engineering resources.
"The new ownership structure constitutes a new lean, efficient and independent organization for the Opel and Vauxhall brands. The current portfolio of Opel/Vauxhall cars and the models in the pipeline are a strong basis for future success."
Inside Line says: Opel's fate is finally decided, but the fallout is not certain, especially the long-term effect on GM's presence in the key markets of Russia and Europe. — Anita Lienert, Correspondent
Add A Comment »