Beijing Automotive Industry Corporation plans to build a US$2bn Opel factory in China and close the carmaker’s Antwerp plant in Belgium if its bid for General Motors’ European unit is successful, the Financial Times reported, citing people close to the situation.
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The FT said BAIC would cut the Opel/Vauxhall workforce across Europe. BAIC and financial investor RHJ International have both made non-binding offers for Opel as GM tries to put competitive pressure on Magna International, the current front runner to take a majority stake in the carmaker.
The Canadian supplier and contract assembler wants to buy 55% of Opel alongside Russia’s Sberbank although GM has kept the bidding process open. The FT said BAIC wants to build Opel models specifically geared towards its home market and plans to open a factory in 2012.
However, a new plant in China might not go down well with GM in the US which is wary of a new competitor in one of its most important growth markets.
The Chinese company has offered EUR660m ($920m) for Opel conditional on EUR2.64bn in state guarantees and proposes to let GM keep 49% of Opel’s shares, much more than the other bidders.
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By GlobalDataThe FT added BAIC’s chances hinge on a failure of GM’s negotiations with Magna which are now at an advanced stage and could be finalised this month according to people close to GM. Opel is understood to have already lined up finance from Commerzbank.
The German government has pledged to support a sale with several billion euros in credit guarantees.
BAIC’s non-binding offer document, obtained by Reuters, showed it plans an eventual network of 400 Chinese dealerships which could sell an annual total of 485,000 units of the Opel Corsa, Meriva, Zafira, Antara, Astra and the old Vectra models.
After initially importing 60,000 Opels into China in 2010 and 2011, it wants to invest US$2.25bn overall into domestic production.
Output would start at 200,000 units before growing to a capacity of 500,000 vehicles annually by 2015.
BAIC wants GM to reduce licensing fees for its centralised patent subsidiary GTO to 3.5% from 5%, in particular for use of GM’s Delta and Epsilon platforms, and BAIC also wants GTO to license all of GM’s alternative powertrain technologies like fuel cells and hybrids to Opel China, Reuters reported.
The European job losses would total 7,584 posts – just over 3,000 in Germany alone.
Production at Opel’s Antwerp plant would stop until the end of March 2010 with the loss of 2,446 jobs in Belgium, and it would “contemplate” closing the plant permanently.
Another 1,300 jobs would go in Zaragoza, Spain, as well as 1,608 in Bochum and 1,160 at Opel’s main German site in Ruesselsheim, the report added.
