OPEL: Deal on fast track, Antwerp at risk
- Trying for early October signing
- Minor issues need resolving
- No buy-back clause
- Antwerp future on the line
The deal to sell a majority stake in General Motors Europe unit Opel to a Russian-backed Magna International consortium could be signed by early October and the Antwerp plant in Belgium is at risk of closure, GM CEO Fritz Henderson has said.
"We're trying to get all things done by early October," he told Reuters in Frankfurt.
Henderson said there were four minor issues, such as how to implement joint purchasing, to be finalised but he was highly confident a sale could close by the end of the year.
"Please don't misread me in saying we have disagreements - it's just that the work was prioritised into four major items that are the highest complexity," he said.
"Those are now completed and could be signed today. We just have some work to go on the smaller agreements before all eight can be done."
GM plans to conclude the sale by the end of November, but Henderson told Reuters he would not rule out the timing could slip by as much as a month for unforeseen reasons.
He rejected speculation that GM might still be examining alternatives to a Magna deal and insisted there was no buy-back clause.
"We want this deal to close. We want Opel to succeed - period."
"There is no call option. There is no put option. So they can't force us to buy and we can't force them to sell. But if they want to sell, we have the right to make an offer," he said.
Though there were restrictions on who Sberbank could sell its 27.5% stake to, Henderson was not concerned over a potential sale to GAZ.
"We're OK with that. We've been OK with that. So if they were to do it tomorrow there would be no problem," he said.
Though GAZ has access to GM's intellectual property under the deal and might end up building Opels in Nizhni Novgorod along with Opel's main plant in St. Petersburg, Henderson said: "It would not likely be done by GAZ, but it could be done," adding that he liked the idea of GM jointly producing with GAZ as previously planned under an earlier proposed joint venture that did not proceed.
Magna restructuring plans for Opel, which include 10,500 job cuts in Europe, were "sufficient," and Opel's losses would narrow considerably in 2010 compared with this year.
"By 2011, we should be able to see the business get into a profitable position. That was what our plan was that was submitted to the (German) government," Henderson said.
"It depends on volumes and many other things but if we execute that business plan together, the business should be able to achieve that."
He also said Opel's Belgian plant in Antwerp and about 2,400 blue collar workers there could face closure under the Magna deal.
"That plant has been under evaluation for some time; no final decision has been taken. But it's certainly at risk," he said.
Efficiency measures like the cost per vehicle did not show that Antwerp was better than the plant in Bochum, Germany, that would remain open under the deal, Henderson said. The EU could object to the Magna deal is the Belgian plant was more efficient.