After securing about $2.1 billion in bridge financing from the German government, Magna International, the firm chosen to take over Opel from General Motors, says the automaker could be profitable in the next 24 months. Magna co-CEO Siegfried Wolf also hinted that Opel products could be sold globally – potentially in the lucrative North American market.
“It’s not just the volume alone that matters,†Wolf told Bloomberg. “Opel has good management. In combination with Magna, I’m quite sure they’ll find the right way to become competitive again.â€
Magna will complete a business plan for Opel by September, but with a new Astra and Insignia anchoring the automaker’s portfolio, the future is bright, Wolf says.
North America, Russia
Magna received much of its financing from Russian bank Sberbank, which will own about 35 percent of the company. In return, Magna says it will partner with Russian automaker GAZ to build 180,000 cars annually in Russia with the potential of far more vehicles.
“I’m convinced the Russian people will have the necessary funds to buy cars,” Wolf said in the interview. Russia is expected to recover strongly from the global recession.
Even Russian Prime Minister Vladimir Putin expressed that he “is happy” that Magna and Sberbank acquired Opel because it will secure jobs in Russia.
Now that Magna has essentially acquired Opel, the Canadian company is said to be stepping up its game to acquire Saturn from GM, says Canada’s National Post. That ownership would provide Magna with a distribution channel for Opel vehicles and, depending on the deal, it could also give the company access to a GM assembly plant.
Magna’s founder, Frank Stronach has not been shy about admitting that he wants to see Opels built in Canada, or at least somewhere in North America, but the company would need distribution channels.
Saturn, Opel and Magna might seem like a match made in heaven – but that may not be the case. GM will continue to hold a 35 percent share in Opel and the Detroit automaker has said that it wants access to Opel products for North America.
“The conflict we see is that GM is planning on bringing in some Opel-engineered products,” an unnamed industry analyst told the National Post. “They would be competing” with each other.”
Then there’s the issue of funding. Magna would need to find a partner like Sberbank – not necessarily an easy task.
“That more than anything else would be the issue right now,” Global Insight’s George Magliano told the paper.
