Magna not looking at Saab after Opel deal collapse

Not that it appeared as a realistic possibility, but I know some were thinking that Magna might have been interested in joining the Koenigsegg Group, or otherwise getting involved in the Saab sale from GM in some form now that the Opel dal is off the table.
That seems to have been hosed down by Magna themselves today:

Magna International Inc is not looking at taking over any other automakers following the collapse of its deal to buy a stake in General Motors Co’s European operations, the auto parts maker’s co-CEO, Don Walker, said on Thursday……
……”We’re not looking at any other transactions in that space,” Walker said in a conference call, responding to a query as to whether Magna might be looking at Ford Motor Co’s (F.N) Volvo unit or GM’s Saab.
“Right now we’re focusing back on the core business, which is automotive parts, and we have no discussions going on right now on any other vehicle-type acquisitions.”

You are now up to date….

Thursday Night Quick Snippets – Opel done edition

This’ll be quick, as you’ll need all day to read the Auto Motor and Sport article below.
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Apparently all issues between GM and Magna have been resolved and the Opel deal is done.

Magna and its Russian partner Sberbank have reached an agreement in principle with General Motors’ management over a contract to buy a stake in GM’s European unit Opel, Magna Co-Chief Executive Siegfried Wolf told Reuters on Thursday
The boards of directors of GM and Canadian automotive group Magna still need to approve a deal before trustees who control a 65 percent stake in Opel can give their final consent.

Now they can get on with the Saab transaction?
Thanks Till!
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Saab GB has a subscription page where you can sign up for the latest info about the 2010 Saab 9-5 as news arises.
GBSaab9-5signup.jpg
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Vehix rates the Saab 9-3 amongst it’s Top 10 Luxury vehicles under $35,000 for 2009.
Thanks Stephen!
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Now scroll down to Gunnar’s AMS report – sensational!

Report: Opel deal stalling on Russian involvement

German publication WiWo is reporting that the GM deal with Magna is stalling due to US Government insistence on limitations to access patents held by GM. Di.se are also reporting this based on the WiWo story.
The theory seems to be that the Russian membership in the Magna consortium, which is not fully detailed, is a worry to US government as around 5% of GM’s business is military (or the like) and the US government doesn’t want Russia to have unfettered access to the patents related to this.
Again, like with the GP.se story, I’m dealing with translations here, and pretty important ones, too. These stories have a pretty big potential to impact Saab’s sale. I’ll deal with that in a moment.
UPDATE – Full manual translation now received…….read on….
Here’s the original story at WiWo.
Full translation now provided by Till – thanks!!:
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The US government gave advice to the US car company not to sign a contract with the Austrian investor Magna as long as russian companies get extensive access to GM patents. This is reported by WiWo according to American negotiating circles.
Magna insists to get access to all developments from the GM patent pool. But these conern not only car technology. Approx. five per cent of GM’s turnover are made with military items. GM’s request to limit the access to car technology was rejeczed by Magna repeadetly, according to negotiation circles.
The Americans accuse Magna of moving the more away from the first MOU the stronger Sberbanks role gets in the consortium. The base distrust on the US side grows even bigger because the Austrians stubbornly refuse to let GM take a look in the contract between Magna and Sberbank.
Other than reported in the German press the parties argue not only about one or two problems. At first GM had listed 52 issues.At the beginning of last week the parties were still did quarrel about 26 issues put tohether under seven headlines. After tuesdays negotiations there were still 19 issues left. These include besides the role of the Russian partners mainly patents, technology transfer, financing and company rights issues.
The US side expects – according to WiWo’s information – the Federal (i.e. German) government to lead back Magna and Sberbank as close as possible to the MOU they initially agreed upon. Dieter Posch, economy minister of Hessen (German federal state), told WiWo: “It’s not enough to negotiate in Washington, Moskau is as important”.
In last weeks negotiations the representatives of the German federal government and the federal states increased pressure not only on Magna and RHJI but also on the seller GM: the claim for more equity capital concerns not only the investors but also GM that keeps stake in the “new Opel”.
US representatives warn of the possibility that the negotiations could fail. ” The federal government should look for other options than Magna and even consider an insolvency.” Berlin and the federal states are said to have manouvered themselves in a corner. “The Magna bid doesn’t match the economical reality, it just fits the German wishes.

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We have two stories posted in the last hour – one about Saab and one about Opel. BOTH of them deal (to varying degrees) with concerns about Russian investment in the companies. Magna’s Russian contingent has a name, but in the Saab story, the Russian connection is an inference only.
What’s of concern is whether or not this potential Russian connection with Saab could scuttle the deal. Koenigsegg Group’s people do like to sit in the background and if key members are looking to sink further into the shadows, then it doesn’t bode well.
Add into this mix the fact that dealers in the US have posted in comments that a halt has been placed on all orders, including the 9-3x, and you’ve got a very muddy picture that needs some clearing up.
Someone needs to come out and say something here to clarify and reassure……
All the whispers I’ve heard in the last week or so indicate that completion of the Saab deal is imminent. I hope that’s still the case.
We need to move on.

Saab Convertible orders stalled

As you may know, production of the Saab 9-3 convertible is moving from Magna’s production facility in Graz, Austria, to Saab’s own factory in Trollhattan. This is all part of Saab’s reconstruction plan, which means it’s good 🙂
It’s good news for Saab, but if you’re a convertible buyer planning to go to a Saab dealer tomorrow to order something to your particular specifications, then you’re in for a wait.
I received this via email last night:
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Hi Steven,
Just heard from my dealer that from now on it is impossible to order a new 9-3 convertible.
They are taking no more orders for production in Graz.
It will take until at least the end of this year (it could be even spring next year, dealer mentioned a half-year long period) before production will start again. Of course production will be in Trollhättan then.
My dealer ordered one a few days ago, just for stock. He had a client that wanted one and then tried to change the build order. It couldn’t be done, so the client has to take what’s in stock.
This doesn’t mean that you can’t buy a new 9-3 cabrio, but contrary to what we are normally used to, you have to take one that is already there. No more build to order.
Kind regards,
A
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As I said, it’s all for the good. It’s just bad luck if you’re after a custom build.
Best go and fall in love with something on the showroom floor.

Some post-Opel analysis about Saab from Sweden

The ink probably isn’t even laid down on the Opel deal yet and the Swedish press are seeing it as a bad day for Saab.
ctm has provided the following reports; one a translation and one a summary of some general themes running through the media.
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First, the following report from e24.se
Saab is a vulnerable prey. A sensible buyer must be selected if the brand is to survive long term. That excludes Koenigsegg and the environment vandal Ira Rennert. The speculation about who the three final bidders at Saab Automobile are goes on with great frenzy.
But let us reverse the argument: Who could be Saab’s dream buyer?
Those who with very high probability still remains in the picture are Fiat, the controversial American billionaire Ira Rennert through the Renco Group – whose main business is mining and metallurgical companies, where he has a documented bad environmental reputation – and the Swedish sports car manufacturer Koenigsegg, backed by a consortium of wealthy people. Just outside is where the parts-giant Magna, which yesterday signed a preliminary agreement to buy Opel, lies like the Old Maid. It appears that Chinese Geely is no longer in the running. So: who can save the heavily loss-making Saab for the long term?
The main criterion for a dream buyer can be summarized in two words: big bucks.
It is especially relevant in a situation where it is very uncertain whether or not Saab may write off debt at almost 1.3 Billion USD which they owe GM if GM is forced into bankruptcy. Can Saab write down the debts they still need about 1 Billion USD before they can show a positive cash flow in 2011, all according to the reorganization plan.
But that is probably not enough. Saab needs a higher volumes, fast. According to the reorganization plan Saab will sell 130,000 cars in 2011. But that does not mean long-term profitability. For that, Saab needs higher volumes.
These will not appear until the new and smaller 9-3 model. And that one is four, maybe five years away. That means even more money for development.
Then it is, to say the least, good to be part of a larger family and be able to share technologies and costs. The obvious would be to be in the same family as Opel, which they now share technologies and manufacturing lines with. Even the coming new 9-3 will share technologies with Opel.
Then Magna would be a good owner. Magna also has cooperation with the Russian Gaz and support from the Russian bank Sberbank.
Magna Russian partners has the added benefit of access to the important Russian market. The only problem is that Magna does not seem to be interested in Saab.
Both Koenigsegg and Ira Rennert, that in practice lacks both industrial and market opportunities, looks like bad alternatives in the long term – even if they in the short term would seem to be able to save Saab and get money from the Swedish Government and EIB loans.
Fiat had been an excellent partner – if they got Opel. But now their interest in Saab would be minimal – and the benefits of Saab for them is also small: Fiat is not in a position to invest in new models and in practice lacks market access in Asia.
But we do not know exactly what lures in the dark in Trollhättan. Maybe Saab has some other dream buyers tucked away, even if the chance appears minimal.
However, Saab took a small formal step on the chaotic path yesterday. Then they received information that they may continue their reconstruction to August 20. But in practice, they only continue until they run out of money sometime in the Summer.
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And secondly, a summary of some thoughts running through the Swedish press today:
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I can tell you that the comments in Swedish media today are not that optimistic about Saab after the Opel deal yesterday. The reasoning goes like this:
Fiat lost Opel and thereby Saab doesn’t matter for them any longer. They see no synergies in just getting a small plant in Sweden + a brand that somewhat have the same mojo as Alfa Romeo.
Magna got Opel and can’t afford Saab as well.
Swedish Govt. demand production to move to Sweden (from the Magna plant) in order to get financial aid. Is that what Magna really wants?
GM has said that they want to get rid of Saab. Magna is now in bed with GM. Why should they want a deal that keep Saab inside the GM-Magna-Opel sphere?
Opel is so much bigger and there operations is not as streamlined as Saabs. It costs so much more to run, and Opel is not a worldwide brand. Still, it only took weeks to have a new owner when the situation became desperate. Saab has been working for months to find a new owner.

Magna to take over Opel

This has just come in via news alert from Automotive News.
Thoughts on what Fiat might try to do in response are welcome in comments.
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FRANKFURT (Reuters) — General Motors and Canadian auto parts group Magna International Inc. have reached an agreement in principle that could rescue ailing German carmaker Opel, sources close to the negotiations said today.
The two sides have been trying to agree on a memorandum of understanding that would serve as the basis for bridge financing of 1.5 billion euros ($2.10 billion) as well as a trustee solution that would protect Opel from creditors in case parent GM files for Chapter 11 in U.S. bankruptcy court.
“A framework agreement has been reached. The goal is to work out as many of the details as possible before the meeting with (Chancellor Angela) Merkel in order to sign a memorandum of understanding today,” one source with knowledge of the talks told Reuters.

The rest of the backstory is here.

Opel have three bidders, too

Here’s just a quick update on what’s happening on the other side of GM Europe.
The Financial Times state that Opel have three bidders, being Fiat, Magna, and a Belgian car parts holding company, RHJ International.

All three groups are expected to make offers for the stake by Wednesday’s deadline, two people with knowledge of the deal told the Financial Times on Tuesday.
Additional bids from up to three other private equity and sovereign wealth investors were still feasible but not as likely, one of these people said.
RHJ’s chances were boosted when it was endorsed by Klaus Franz, the head of Opel’s powerful works council, in an interview with the FT.

Wouldn’t it be ironic if Fiat and Magna missed out on both of GM Europe’s properties?
It’s all coming to a close, very soon.
Thanks to PT for the link!

Survivor Saab – time to vote someone off the island?

SurvivorSaab.jpg
Saab’s court filing mentioned that they are now in a position where they are talking closely with just three bidders out of the initial group of 27 who showed interest in the company.
FIAT are outside this group as they were never one of the original 27. They are trying to include Saab into a deal for all of GM Europe, but Saab’s process carries on regardless, which indicates to me that Saab’s inclusion in a FIAT deal is a remote possibility, at best.
Previous discussions here at TS SU have centered on four other possibilities:

  • The Renco Group
  • Magna International
  • Koenigsegg
  • An unknown Chinese bidder.

With only three parties left, as per Saab’s own court filing, it’s clear that one of these has to go.
This is not a matter of who would you like to see leave the island. That decision’s already been made by Saab’s own tribal council. This post is all about figuring out who’s been voted off.
My theory won’t be a popular one with readers here, but here I go…..
Magna has been voted off the island.
Shock horror! Well, sort of, but not really.
As I’ve mentioned before, I am quite positive that Renco are still in the game at this point. I’d stake my house on it.
The Chinese, although unknown at this point, have been talked about in very strong terms in a few Swedish press articles. They’re currently leading the odds at Ladbrokes, too.
Koenigsegg could be the ones to leave, but I’m not picking them.
Why?
I’ve picked Magna as the ones to have left the island because I’m not convinced they were ever on the island to begin with.
In terms of news coverage, Magna is only mentioned as a company looking to get hold of Opel. The only news service to have talked about them in terms of buying Saab is Auto Motor and Sport, and with all due respect to my friends there, I’m not yet convinced their source was correct.
And even if it was correct, would Magna be likely to proceed further in their Saab negotiations when Deutsche Bank know that they’re gunning for Opel as well. It just throws too many optional scenarios into play.
“OK, this is our bid for Saab if we fail at our bid for Opel……and this is our bid for Saab if we’re successful with Opel. One will involve the Russians and one will be just us…….Yeah, I know we’re in hard discussions about moving assembly of the convertible from Graz, but let’s put that aside for a moment……”
I just don’t see this happening, and I haven’t seen Magna say they’re interested in Saab at all.
That’s my 2 cents. You know where you can have yours….

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