Automakers concerned about the possible Magna purchase of Opel from General Motors are contacting US partsmakers about diverting some business from the Canadian supplier if it succeeds.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
“The contracts being shopped around cover parts that auto makers feel separate their vehicles from others,” said one of seven suppliers contacted by Dow Jones Newswires. “They just don’t have clear evidence yet that their ideas won’t find their way into Opel cars.”
Several suppliers who asked to remain anonymous told the news agency lingering concern over the Opel venture is leading some Magna customers to review their business.
Most of the concern has focused on proprietary electronic components and interior designs which are most often seen and used by consumers. The suppliers said they have been asked to quote pricing and to confirm whether they can handle new demand.
Magna executives have said they would create an internal ‘firewall’ to protect proprietary information from parts’ clients leaking into Opel – and vice-versa – though they have acknowledged concerns among some customers.
Winning Opel but losing other automaker business could prove to be a huge financial mis-step, Dow Jones said, noting that Magna is winning new contracts as many of its US competitors deal with bankruptcy reorganizations.
Volkswagen chief executive Martin Winterkorn was one of the first to warn that he would consider dropping some of his contracts with Magna if it won control of Opel.
Ford is monitoring the situation but doesn’t expect the issue to affect its relationship with Magna, spokesman Todd Nissen told Dow Jones. Chrysler declined to comment and GM said it had no problems continuing to use Magna as a supplier.
Magna spokeswoman Tracy Fuerst declined to comment.
Until now, Magna has operated only as a Tier One supplier and, through its Magna Steyr plant in Graz, Austria, as a contract vehicle assembler for automakers including Chrysler, Daimler and BMW. Until now, Magna was never a direct competitor to automakers.
“I think there may be some change but I doubt you will see large contracts shifted away,” Mike Wall, an auto analyst with CSM Worldwide, told Dow Jones.
“This is new territory. An auto-parts supplier becoming an automaker. Magna needs to demonstrate that they can build separate firewalls to protect everyone. If they fail to communicate that strongly, however, there could be some problems.”
