Unless you’ve been holidaying on Mars, you’ll probably be aware that the word ‘Magna’ has been popping up a bit in the news this week. Or, as it must seem to legions of auto industry and business writers, for months.
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The Aurora, Canada, based autoparts maker and contract assembler’s expected takeover of a 55% slice of General Motors’ Opel/Vauxhall unit, in cahoots with Russia’s Sberbank, was, as we noted today, something of an elephant in the room at this week’s media launch of the redesigned fifth generation Astra, spiritual successor to the 1960s Opel Kadett and Vauxhall Viva lines.
It’s a must-have model for Vauxhall and Opel dealers in Europe – a five-door, C-segment family hatchback with strong appeal for private retail and fleet buyers alike. On specification, equipment, build quality and price, it’s a highly competitive match for its arch-rivals, the Ford Focus (top seller in UK) and Volkswagen Golf (top seller in Europe) and, ordinarily, just the car would have been the star at this week’s media event.
But these are not ordinary times. Parent GM in the US was, only a few months ago, bailed out of bankruptcy by the federal government. While ‘new GM’ (with the occasional change of executive) gets down to business in new slender form, soon to be shorn of Pontiac, Saab, Saturn and Hummer and several hundred ‘underperforming’ dealers, a bunch of liquidators have started work on the toxic brew that is ‘old GM’, a task that some reports recently said could take up to 30 years! The GM we all once knew is no more.
This side of the Atlantic, the deal to sell the controlling Opel/Vauxhall stake to the Magna consortium still seem far from cut and dried: governments and unions in both Britain and Spain have yet to sign off and, as this is written, talks are continuing. Almost daily, it seems another obstacle pops up in the road to a signed and sealed deal. Even selling Saab is not likely to be without its problems.
Hence this week’s Astra launch to a much wider audience than the usual roster of consumer writers and commentators and the opening up of the plant for inspection by business commentators and local radio and TV – a move usually rare this early in the production ramp-up of a brand new model.
It’s hard not to feel some sympathy for the Ellesmere plant workers who have worked hard to bring the factory up to scratch to win the Astra contract and got top-class product off line and showroom-ready on time to agreed volume and quality standards. Or for the marketers and PR people who must now promote a fine product without knowing what their own futures hold Under New Management.
As our own Rob Golding noted today, Vauxhall now is “boxed in by shorter working hours required by a union that has given plenty over the last few years and did not expect the draconian change that the arrival of Magna would cause”. No wonder Unite – the UK’s equivalent of the UAW – was reluctant to sign off to the proposals, but those 11,000 job cuts will have to be shared out around Polish, Spanish, German, Belgian and English factories somehow, no matter what the politicians or unions in each country would wish in the face of the worst recession in years.
At best, we were told this week, the outline – a memorandum of understanding – of a hard-fought final deal should be signed this month, with a final contract ready for ink by end of November. We hope so – and we bet tens of thousands of GM Europe workers hope so, too.
Have a nice weekend.
Graeme Roberts
Deputy/News Editor
just-auto.com
