GM sale chief negotiator
August 6th, 2009 by Richard Aucock
GM Group vice president John Smith has taken the unusual step of speaking out on the sale of Vauxhall.
Following what he describes as ‘misleading’ coverage regarding the sale of GM Europe, Smith has clarified proceedings to date:
• Best and final offers received on July 28
• Input from German and other European Governments, European Commission and Opel Works Council has been sought
• Clarification meetings with Magna and RHJ have been conducted
But, Smith stresses, Magna has NOT been selected as the preferred buyer.
In his blog, Smith describes the essence of the two deals, in fascinating detail. The Belgian RHJ offer, he reckons, is ‘the simpler of the two’, throwing up few significant issues.
It’s the Magna proposal that’s proving trickier, due to issues over transfer of GM intellectual property. The US giant doesn’t want the Russians getting their hands on its know-how.
But that’s not the only stumbling block: indeed, Smith lists them all – ‘New Opel involvement with Chevrolet in Russia, intellectual property transfer rights in Russia, advanced technology access, product development responsibilities, minority shareholder rights and other items.’
So far, they’ve solved around a third of those. Meaning there’s a long way to go, particularly as ‘the difficulties of getting to ‘yes’ with three parties in the room were very much in evidence yesterday.’
He even predicts FURTHER issues being raised in the coming days!
These will focus on three key issues:
• The amount of government money required
• The degree of ‘independence’ truly in Opel’s long-term interest
• The question of focus - the scope of the proposal and the ability to spend time and money on the right few things.
In summary, though, Smith is keen to say that one bidder is not currently preferred over another. What’s more, Magna certainly HASN’T won the bidding war for GM Europe.
We strongly advise you get over there yourself, and read the full lengthy transcript of what Smith has to say. Anyone who’s been involved in a company merger will sympathise with his plight!
Question is, when will the next developments come? We’ll keep you posted…
By Richard Aucock
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