Magna Won't Mix Opel and Supplying Business

Magna yesterday received GM's final approval to purchase the German brand Opel so the Canadian - Austrian partsmaker already started thinking at the future. Only that other carmakers that were doing business with Magna are worried that the recently-agreed takeover might affect the supplying operations and lead to a potential conflict of interest.

But Magna won't mix the two businesses, a company official told Reuters today assuring the other automaker currently working with the Canadian firm that it will establish "firewalls" between Opel and the supplying operations.

"As soon as the takeover is successfully completed, Magna will erect appropriate firewalls to guarantee a complete separation of its current automotive supplier business and Opel, so that confidential customer information remains completely protected," Magna founder and Chairman Frank Stronach said in a statement.

Volkswagen is one of the carmakers that raised concerns over such a deal, with officials representing the German company expressing their disapproval towards a potential takeover since a few months ago.

"Volkswagen will monitor this development very closely," spokesman Michael Brendel was quoted as saying by in June. "Tax money has been used to a large extent for Opel's rescue. We hope that through this a sustainable and successful result will be achieved effectively."

Furthermore, auto analysts said today that GM should have kept Opel because Magna's supplying business could interfere with Opel's interest and lead to losing contracts in the automotive industry.

“The most meaningful choice would have been a global company that produces several millions of cars (per year), such as GM or a Chinese producer,” Frank Schwope, from Germany's Nord LB Norddeutsche Landesbank, said according to Reuters. “Magna is not a producer of cars in the classic sense, and I could imagine that some other producers could be upset about the decision. As a consequence, Opel may lose some contracts."
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About the author: Bogdan Popa
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Bogdan keeps an eye on how technology is taking over the car world. His long-term goals are buying an 18-wheeler because he needs more space for his kid’s toys, and convincing Google and Apple that Android Auto and CarPlay deserve at least as much attention as their phones.
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