Friday, June 5, 2009

Opel takeover to be done by September: Magna

Canadian auto parts supplier Magna International Inc. hopes to complete a deal to take a majority stake in car maker Opel by September, Magna's co-CEO said Wednesday.

Siegfried Wolf visited Adam Opel GmbH's headquarters days after hammering out an agreement with Opel parent General Motors Corp. and the German government to move forward with a rescue plan for the company.

"We should roll up our sleeves now and clear up the last open points," Wolf said after an employee meeting. "Then I think we can very quickly come to a conclusion."

Wolf said a contract could be signed in the next four or five weeks, but it is likely to be the end of September before all involved have given their final approval. "Time is very, very tight," he said.

Opel on Tuesday received the first 300 million euro ($462 million Cdn) instalment of a euro1.5 billion ($2.31 billion Cdn) bridging loan granted by the government to keep the company afloat while work continues to conclude the takeover.

That arrangement, which saw Opel and British sister brand Vauxhall placed under a trustee, shielded the European operation from parent GM's bankruptcy protection filing.

The preliminary agreement reached Saturday calls for Magna to take a 20 per cent stake in Opel and for state-controlled Russian lender Sberbank to take a 35 per cent interest, giving their consortium a majority.

GM will retain a 35 per cent holding, while the remaining 10 per cent will go to Opel employees.

Opel's employee council chief, Klaus Franz, said the aim is for the Opel that emerges from the process to produce an annual two million vehicles within the next five years, an aim that he said could be reached if the company has a global footing and a presence in Asia.

Last year, Opel and Vauxhall combined produced 1.5 million vehicles.

Opel employs 25,000 people in Germany, nearly half of GM Europe's work force.

German government officials have said Magna's plan anticipates between 7,500 and 8,500 job cuts across Europe.

Franz said the employee council was standing by its demand that no plants be closed and that layoffs be avoided, but conceded that negotiations on factories in Bochum, Germany, Antwerp, Belgium, and Luton, England, would be a "tough nut."