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post #1 of 2 (permalink) Old 06-02-2009, 10:33 AM Thread Starter
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Magna Wins Opel Bid, Wants to Build Cars in Canada


By solidifying a deal to take control of GM's European operations, Canada's Magna International Inc. is eager to start producing Opel cars in Canada.

"We want to build Opel cars in Canada," said company founder and CEO Frank Stronach. "Canada should have its own Canadian company … a truly Canadian automobile industry."

The third largest auto parts supplier in the world, Magna certainly has the resources and the know-how - it just doesn’t have the facilities to build cars in Canada. That, however, might all change as Chrysler may close operations and General Motors Canada recently shut down its truck plant in Oshawa, Ontario.

The lower value of the Canadian currently would likely help matters and should be enough to easily offset the cost of shipping vehicles to Europe - although it's not clear that Canadian-built cars would be for the European market, as moving production outside of Germany would certainly be a devastating public relations move.

What Stronach may have in mind is for Opel-based cars to be built in Canada for distribution in Canada and the U.S. As Magna is also currently bidding to take control of Saturn from GM, it's entirely possible that production of those models, all but one of which are based on Opel vehicles, could happen in Magna's backyard.

There is also a strong possibility that Magna will expand into the Russian car market.

Magna's partners in the Opel deal include Sberbank of Russia and both Stronach and Magna have strong ties to Russia. Stronach actually did work as an auto industry adviser for Prime Minister Vladimir Putin and Russian Magna investor Oleg Deripaska (the owner of Russian truck maker GAZ) has had long standing aspirations to sell consumer cars.

Building Opel models in Russia is a strong possibility, however, it is unlikely those models would be exported to Europe.

General Motors is expected to announce final candidates for the sale of Saturn in the next few weeks.

More: Magna Wins Opel Bid, Wants to Build Cars in Canada on AutoGuide.com
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post #2 of 2 (permalink) Old 06-03-2009, 09:46 AM
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Today's news is less encouraging:

Magna says can't sell Opel cars in U.S., ChinaBuzz
Reuters, Tuesday June 2 2009 * GM protects U.S. market, protects China for now
* Magna says little appetite for buying Saturn, Saab
* Sees Opel breaking even in three years, profit in four
* Seeks government help for electric vehicle production (Adds remarks on electric vehicle production)
By Randall Palmer
OTTAWA, June 2 (Reuters) - Magna International Inc is prevented by an agreement with General Motors Corp from selling Opel cars in the United States and, for now, in China, the chairman of the Canadian auto parts company said on Tuesday.
"The agreement with General Motors does prevent us from selling Opel in the United States," Frank Stronach told reporters at a news conference in Ottawa. A Magna-led consortium has agreed to buy European automaker Opel from GM.
Asked if the agreement applies to China too, he said, "Yes, for the moment, but keep in mind that General Motors -- we've been working together for 50 years, we've been great partners, and they still own 35 percent (of Opel)."
He suggested the prohibition on Opel sales in China might be flexible. "If it makes economic sense you might persuade people to change something."
Stronach also said he expects Opel to break even in three years, and to turn a profit in four.
Now that Magna has agreed to take on Opel, Stronach displayed little appetite for buying Saturn and Saab from GM, which is trying to unload those brands.
"We have to digest Opel now, and we have got a mouthful, so we'll see how quickly that will take place," he said.
Stronach was in the Canadian capital to seek government funding for a project to produce electrical systems for electric cars and, eventually, electric cars themselves.
"I'm very confident that Magna will be amongst the leaders in selling and building electric cars," he said, after demonstrating a Ford prototype with a Magna electrical system.
He said it would cost about C$300 million ($280 million) to build a plant, and he would like to build it in Canada, but he is being courted by U.S. states and European countries.
Magna is seeking a federal loan for half that amount under Canada's Automotive Innovation Fund, designed to support research and development projects to build greener vehicles
"If we get a loan we know we could speed it up. We could make sure it's going to be in Canada," he said, adding that mass production could begin within three years.
Stronach said that if the company did produce electric cars, it would make sure it set up walls between the car manufacturing and parts manufacturing divisions, so as to assure fair treatment for major automakers that buy Magna parts. (Additional reporting by Louise Egan; editing by Rob Wilson)

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