While details of the deal won't be finalized for several weeks yet, the German government has given initial acceptance to an offer from Magna International Inc and the Russian-government-controlled Sberbank that will keep GM's financially-troubled Opel AG unit out of bankruptcy regardless of what happens to its parent unit. Under terms of an agreement announced early Saturday morning, GM will still retain a 35 percent interest in Opel while Canadian-based Magna, North America's largest automotive parts supplier, and Sberbank, which will provide most of the financing, will receive holdings of 20 and 35 percent, respectively. The remaining 10 percent of the new company will be owned by its employees. To help see the transition process to a successful conclusion, the Germany government has also committed to providing $2.1 billion in bridge loans to get it though what Magna execs think will be a one to two month interval. Opel and other GM of Europe assets -- including Britain's Vauxhall, but not including Saab -- will be placed under the care of a trustee that will effectively shield them from any financial harm.
The negotiations were rife with unexpected twists and turns, not the least of which was GM's last-minute call for several hundred million dollars in additional interim funding, a demand that finally led Fiat's CEO Sergio Marchionne to pull his company out of the negotiations on Friday. Although there's still no decision on exactly how many factories will be closed or workers dismissed as part of the restructuring, the Magna/Sberbank group was clearly the suitor favored by most Opel employees. Magna, which already is partnered with Russian automaker GAZ, hopes to use its newfound leverage in that country to mount an Opel-based marketing offensive that would lead to producing over a million additional units there and in other Eastern European countries while introducing a host of newly acquired technologies into the Russian auto industry.