This deal has been off-again, on-again for months, for more reasons than you can imagine. The biggest roadblock seems to be that GM didn’t trust the Russians: one, because the country’s largest bank, Sherbank, was providing backing; and, two, because it “had been reluctant to share technologies—particularly those of the Chevrolet Volt’s Opel twin, the Ampera—with the Russians.” We hear that technology safeguards will be part of the agreement.
Some of the history is reported out here, and we told our version of it here. It has been a story of backroom corporate dealing and misdealing, governmental maneuvering, even geopolitics. Anyway, GM will now keep 35 percent of Opel, Magna will get 55 percent, and Opel employees 10 percent.
You’ll be glad to hear that Prime Minister Vladimir Putin approved. He told journalists he hoped it would lead to true integration of Russia into the European economy. By the time you read this, the deal should be done. And these GM guys aren’t going to leave German Chancellor Angela Merkel waiting at the altar again. Jobs for about 25,000 workers are at stake, plus German interim financing and prestige.
GM has owned Opel for 80-odd years and what it finally came to, I think, was pressure from the German labor leaders. Workers in August rescinded an agreement to forego vacation bonuses and demanded the company pay the €70-million balance owing as a “warning shot.” So said Automotive News Europe, adding that the workers “could ultimately decide to demand the 4.2 percent industry wage hike from last year’s collective bargaining agreement that they intended to waive for five years.” Which would not be small change.
So, who knows what finally brought the GM board to agree? If you’ve followed the Opel story, give us your thought on why they caved. Or did they?