A deal to rescue Opel looks to have been finalized just hours before the company's parent, General Motors, files for bankruptcy protection. The deal will hand control of German automaker Opel and British automaker Vauxhall to Canadian autoparts giant Magna International.
The last step needed to complete the deal was securing a bridge loan of over $2.1 billion to cover short-term operating costs. Germany's national government will pony up half of the short-term loan, while the German states of Thuringia, Rhineland-Palatinate, Hesse, and North Rhine-Westphalia will combine for the other half. The last two states mentioned approved their portion of the loan yesterday, while all four states play home to Opel facilities.
After all the discussions were concluded, Juergen Ruettgers, governor of North Rhine-Westphalia, said, "The time of uncerntainty is over. ... The main components of Opel's future remain in Europe."
Russia's largest bank, Sberbank, backed Magna's ownership bid in exchange for 35% of the automakers. Magna keeps a 20% stake, giving the team a majority holding. GM will keep 35%, with Opel employees getting the remaining 10%.
All four German Opel factories will remain open, under deal terms. However, nearly 2,600 will likely lose their jobs in Germany, part of roughly 8,000 European job cuts. Much to the dismay of U.K. officials, Magna has been quiet on their plans for Vauxhall, and the 5,000 British workers based in two plants there.
The two automakers also operate in Belgium, Hungary, Poland, and Spain. As recently as 2006, Opel had also been using a facility in Portugal.
Roland Koch, governor of Hesse, spoke optimistically of the deal, saying, "We've decided that there is to be a new European company."
"I think that for Opel and its employees, it is an unbelievable chance."
Magna to Acquire Opel - deal details
By Zack Newmark
June 1, 2009 1:21 PM
Filed Under: Corporate/Financial, German, Industry, Opel, Vauxhall
Comments
Michael
June 1, 2009 2:25 PM
So Opel is now a Russian-American-Canadian joint venture. I wonder how long it will take for the Russians to become majority shareholder. They need only 15%...
Tommy_S
June 1, 2009 2:54 PM
Bristol411S3: Saab is lucky one: http://www.autoblog.com/2009/05/29/report-koenigsegg-a-finalist-in-bid-to-buy-saab/
Edited by user on June 1, 2009 at 3:03 PM
vertigobike
June 1, 2009 3:07 PM
In every takeover there's job losses - fact. But as today GM files for bankruptcy in the US I think that was a pretty good deal for Opel/Vauxhall and its workers. UK people: don't be offended about what I'm going to say next but... I really think Vauxhall should be 'terminated' as a company as for generally they're rebdaged Opels... so it's a waste of money and resources - Opel cars can perfectly be sold in the UK as 'Opel'... otherwise they'd be better off selling Vauxhall to another company which would produce their own models. In summary I think in the overall it's a good deal for Opel as it'll continue to exist with new, 'refreshed' models and with more reliability and innovation than the current fleet. Obrigado.
Mister-G
June 1, 2009 6:19 PM
Whilst there's logic to axe the Vauxhall brand, the fact is Vauxhall has a strong image as it is (good or bad). It will cost more money for Vauxhall to make new models themselves, I just can't see Vauxhall go it alone. The advantage of the Opel/Vauxhall partnership is they share the same car (as we all know), their budget is more cheaper and most importantly simpler unlike the US buddies (Chevy, Pontiac, Cadillac, Buick etc) which have complex budgets and different models and platforms. There are strong logics for the Vauxhall-to-Opel rebranding but as the british people are still loyal to the Vauxhall brand just like the Aussies are loyal to the Holden brand I can't see this rebadging happening.
Edited by user on June 1, 2009 at 6:36 PM
Dr.Mabuse
June 2, 2009 4:09 AM
But remember, Holden does significant design and engineering work that (arguably) the Americans would have trouble replicating (for the price.) I'm not sure the same thing can be said for Vauxhall.
vertigobike
June 2, 2009 10:03 AM
I think it's just a matter of re-educating people and introducing new habits into the 'system'; saying that the British are very loyal to Vauxhall is 'old-fashioned'... they have to learn to be loyal to Germany-based Opel... as well as to learn to be loyal to the Euro currency sooner or later... so it's a matter of time until Vuahxall ceases to exist, in my opinion. Obrigado.
Mister-G
June 2, 2009 5:24 PM
I can see the point of re-educating but right now you'll be suprised that the British are in no mood for re-education right now LOL, as the european election is under way the only the only party that they could trust is UKIP and desperations of pulling out of the EU state altogther as the people are outrage on the expenses claims by other parties and no longer trust them. Personally I wouldn't mind driving an astra, vectra, insignia etc with an opel badge in britain, heck there were even rumours before Magna stepped in that if Opel and Vauxhall were to be seperated then the Chevy cars (or Daewoos dare I say) would have been rebadge as Vauxhall therefore eliminating Chevy dealerships from the UK, if these "wild" rumours were true it just shows that the Vauxhall brand is pretty hard to get rid off although not impossible. What I find odd is reading the news according to the times online Professor Kevin Morley ex-Rover director, who is now director of business studies at the University of Warwick, says the russians Gaz (who parners Magam) vows to drop the vauxhall brand to appeal opel to russian market more, why should the russians care about the vauxhall brand whilst its strictly a UK market only brand? what the russians called Zhiguli we called the Lada. Also the previous Opel Astra was sold in Russia as the Chevrolet Viva. Well I guess vauxhall is a "ghost" brand, they do love haunting don't they?
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