"Magna escaped disaster one more time," - Free To Air TV Forum, FTA Keys and Downloads, Dish Network, Nagravision 3

GrnMachine · #1 (**permalink**) 4th November 2009, 05:08 AM

"Magna escaped disaster one more time,"

General Motors Co.'s surprise decision to pull the plug on the sale of its German Opel unit to a consortium headed by Magna International Inc. is a blow to the ambitions of the Canadian auto-parts maker.
Yet many who follow the company say strategically, being dumped by GM is a blessing.
Magna's co-CEO Siegfried Wolf issued a statement to cap the end of the company's half-year pursuit of Opel, thanking its main consortium partner, Russia's OAO Sberbank, and promising to "continue to support Opel and GM in the challenges ahead."
"We understand that the [GM board] concluded that it was in GM's best interests to retain Opel, which plays an important role within GM's global organization," Mr. Wolf said in the statement.
Owning a full-fledged carmaker has long been a dream of Magna founder and chairman Frank Stronach.
Magna made a bid for Chrysler in 2007, only to be beaten out by private-equity firm Cerberus Capital Management, in what most observers now say was a stroke of luck.
Magna may be similarly fortunate this time, some analysts say. An Opel turnaround would have been tough and risky, and a drain on Magna's management.
Some of Magna's customers had expressed qualms about working with a supplier that would also be a rival, with some, like Volkswagen AG, openly threatening to shift business.
Losing Opel also means that Magna, one of the most financially sound and cash-rich companies in the auto industry, may feel free to acquire operations or assets from troubled auto-parts makers on the cheap.
"Magna escaped disaster one more time," says Dennis DesRosiers, an independent auto-industry consultant in Toronto. "This forces Magna back to a more rational strategy."

Thread Tools
Show Printable Version Email this Page
Display Modes
Linear Mode Switch to Hybrid Mode Switch to Threaded Mode