The board of General Motors last week settled on the bidding team of Magna International and Sberbank as the prospective buyers of a majority stake in Adam Opel and Vauxhall Motors. But, wait, there’s more!
This news by no means suggests that the issue is settled. Oh, no, not by far! Any business deal involving the European Union has more wickets than a championship tournament in extreme croquet.
The German government won the decision from the GM board it was lobbying hard to get in recent months. Other parties were not as satisfied, however. Government representatives on the board of the Opel Trust, which was put in charge of Opel and Vauxhall last spring as GM was about to enter Chapter 11, quickly weighed in against the deal. Those representatives said Berlin was too quick to put political considerations ahead of sound business decisions in easing the path for Magna and Sberbank. What, politics?! In the middle of a campaign for a general election later this month? You think this is health care reform in the States?
The European Commission warned that the deal better meet its M&A regulations, or else. The Belgian government is unhappy that Opel’s plant in Antwerp may be shuttered, while plants in Germany and the UK would remain open, albeit with job cuts. The powerful IG Metall trade union said it expected negotiations with Magna on workforce reductions in Europe to be “tough.” Frank Stronach, the Austrian-Canadian chairman and founder of Magna, is one tough guy in general, believe me. He grew up during the Great Depression and the Second World War. He was able to keep works councils out of Magna Steyr, his company’s Austrian subsidiary, in a significant victory against labor unions.
The dickering over Opel and Vauxhall will go on for months to come.
It becomes interesting. Ii seems like Opel is loosing i moment and winning in another. It was good to read this post.