BMW, VW Begin Battle Over Carbon Fiber Producer SGL

Carbon fiber, the wonder material of the new century, is poised to cause pretty much the same drama other valuable materials have caused over the years for mankind. Since there are only a handful of carbon fiber producers that really know what their doing, the fight for their control has already begun between the major manufacturers of the world.

Having been among the first to announce the use of carbon fiber on a large scale on its cars, BMW already secured a joint venture with SGL Automotive Carbon Fibers and began erecting a facility in the US that would be in charge with manufacturing the parts for BMW vehicles.

Before this week, BMW was in control of about 22 percent of the carbon fiber producer. Sometime earlier this year, through the back door sneaked Volkswagen, who purchased 8 percent of the company. At the time, BMW investor Susanne Klatten reacted and said that if needed, she would buy a blocking minority stake in SGL to block any Volkswagen interference, despite VW's assurances that its stake in SGL would never go passed 10 percent.

Apparently, something happened this week, as Klatten increased her participation to 27.3 percent and announcing plans to raise it even more to 29 percent over the next 12 months. Already, BMW's investor, at the same time of German industrialist Herbert Quandt, got the veto right over any major decisions.

As for the BMW-SGL business, the joint venture, established last year, will conduct its business through two companies, one based in the US and one in Germany. SGL owns 51 percent of the new business, while the German carmaker has 49 percent.