Magna chief says talks planned with Volkswagen on Opel deal concerns

TOKYO — The chief executive of the Canadian parts maker that’s buying a stake in Opel from General Motors said Tuesday talks are planned with Volkswagen to ease the German automaker’s concerns about the deal.

Don Walker

TOKYO — The chief executive of the Canadian parts maker that’s buying a stake in Opel from General Motors said Tuesday talks are planned with Volkswagen to ease the German automaker’s concerns about the deal.

“Volkswagen has said they are concerned, so we need to finalize internal procedures and have more discussions with them,” Don Walker, co-chief executive of Magna International Inc. (TSX:MG.A), told reporters.

He declined to give details, saying he hadn’t talked with Volkswagen yet.

Magna has a huge, international auto parts business that supplies virtually every major automaker in the world. Now, the Canadian company will also assemble vehicles through Opel that compete with some of its main customers in Europe.

GM had initially said it preferred another bid from Brussels-based investment firm RHJ International, in part because of fears that patents and other GM property could wind up with competitors, especially in the growing market of Russia.

Analysts say some automakers, such as Volkswagen AG, may decide to move away from buying Magna parts.

Walker acknowledged he needs to ease concerns from customers, but reiterated that Opel and Magna will remain separate.

He said Magna, based in Aurora, Ont., wasn’t “taking over” Opel and will remain a parts maker.

“Most of the customers I have talked to personally want to know how we have a separation to protect technology, but they have told me that they are comfortable with it,” said Walker.

In Toronto, a Magna executive told a CIBC investor conference that the company has a long history of working with its customers’ proprietary information and has never had a problem.

Louis Tonelli, vice-president of investor relations, pointed to Magna’s Austrian-based operations, Magna Steyr, which develop and build cars for various automakers.

“We were very involved in the development of the BMW X3 in the very same facility as we are building Mercedes vehicles,” Tonelli said.

“BMW recently said that we showed through the development of the X3 that we could have the appropriate walls in place and keep proprietary information proprietary, and that gave them a lot of comfort.”

Tonelli said “a number of important safeguards” will be put in place to protect customers’ technology. Magna’s parts business is already quite decentralized, and will remain completely independent from Opel. In addition, any Magna employees who work for Opel will cease to have any connection to the parts business, he said.

Magna will fill three seats on Opel’s 20-member board.

“We are fully committed to protecting the proprietary technology and interests of our customers and will continue to respect all confidential information with which we are entrusted,” Tonelli said.

“As far as I know, there hasn’t been any business lost as a result of this transaction,” he added.

Tonelli went on to emphasize how important the Opel transaction is to Magna’s ambitions in Russia, which is widely expected to soon surpass Germany as Europe’s biggest car market.

He said Magna has over $200 million in booked business in Russia to date.

“But the potential number we’re looking at is much, much bigger than that, and Opel gives us a chance to get even more involved,” Tonelli said.

Magna’s A shares gained 80 cents to $45.47 on Tuesday at the Toronto Stock Exchange.

Just Posted

Hospitalizations jump in Red Deer due to opioid poisonings

Small city hospitals impacted more by opioid crisis

Central Alberta councils learn more about Bighorn Country proposal

A collection of central Alberta politicians are learning more about the province’s… Continue reading

High-speed chase led to fatal collision, jury hears

A Delburne man accused of manslaughter caused a fatal rollover collision during… Continue reading

‘Part of the solution:’ Alberta seeks proposals to build new refinery

EDMONTON — Alberta is looking for someone to build a new oil… Continue reading

Online ads spoil Christmas surprises, raising privacy concerns: experts

Lisa Clyburn knew she had found the perfect gift for her nine-year-old… Continue reading

Sebastian Giovinco, Jonathan Osorio and Adriana Leon up for top CONCACAF awards

Toronto FC’s Sebastian Giovinco and Jonathan Osorio are up for CONCACAF male… Continue reading

Huitema, Cornelius named 2018 Canadian Youth International Players of the Year

TORONTO — Canada Soccer has named striker Jordyn Huitema and defender Derek… Continue reading

Review: Too much Spider-Man? Not in the Spider-Verse

You might be forgiven for feeling superhero overload this holiday season. Had… Continue reading

‘Modern Family’s’ Sarah Hyland had second kidney transplant

LOS ANGELES — “Modern Family” star Sarah Hyland says she had a… Continue reading

Orlando SC acquires Canadian Tesho Akindele in trade with FC Dallas for cash

ORLANDO, Fla. — Canadian forward Tesho Akindele was traded to Orlando City… Continue reading

Koskinen notches third shutout, McDavid gets winner as Oilers blank Flames 1-0

EDMONTON — The Edmonton Oilers appear to have shored up their defence… Continue reading

Most Read