Magna, Opel Confident the Deal Will Be Done

Even if General Motors' retaining possession of Opel and restructuring using government money gets closer to reality, Magna and Opel executives expressed their confidence that the agreement will still go through. John Smith, GM Group Vice President Corporate Planning and Alliances (and GM’s chief negotiator for the sale of a stake in Opel/Vauxhall), said in a statement last week that GM's board will meet on November 3 to discuss the latest changes in Magna's proposal.

Magna Co-CEO Siegfried Wolf told Reuters that the most important obstacle in getting the deal done is EU's decision.

"I am convinced that we will sign the contract soon if the EU...agrees. We are very, very hopeful," he said.

As said, if the deal with Magna fails, General Motors might keep Opel and start negotiations with the German government over a financial aid that could allow the US-based manufacturer to reorganize Opel. It appears that several Berlin officials have already agreed with such an idea, but a final decision is to be made after the Magna verdict is announced.

"The new government will take another look at decisions made up to now on Opel and imminent conditions to be set by the European Commission," Opel Trust member Dirk Pfeil told the Frankfurter Allgemeine Zeitung. "The result could be a solution where Opel stays completely within the General Motors group," added Pfeil.

In the meantime, GM and Opel continue negotiations with Magna and expect EU's decision to find out whether the deal can go through. Under the terms of the agreement, Magna International will take control of a 55 percent stake, while GM will keep control of a 35 percent share.