Automotive Journal

It's a pretty intense competition going on for control of Opel/Vauxhall. From what I can gather, GM in the US is having major second thoughts over selling to Magna. Now that it is out of Chapter 11, tails are perhaps up a bit at the Ren-Cen.

Losing control of its European operations might not look to clever in the future. GM is said to be keen on a buy-back clause - which is not at all attractive on the Magna side. But RHJ International might not mind that at all - in fact, its investors might be reasonably optimistic of a sizeable return and, let's face it, they probably don't want to run a car company for fun or the long-term.

There is a big but, though. That 'but' is German politics. German PM Merkel has entertained Russia President Medvedev today. Medvedev's timing looks good, but actually might backfire. He has apparently got Merkel to voice strong support for the Magna bid.

However, that very explicit Russian political involvement might serve to highlight to the Americans at GM that they are perhaps on the verge of giving away something really rather valuable. The US financiers behind RHJ are more of a known quantity (and potentially more pliable) than the Russian interests standing just behind Magna.

The Atlantic divide here may be getting deeper. So, RHJ needs to address the German question. A problem: the hard-nosed financiers may well have concluded that Opel's biggest competitive problem is its heavy German manufacturing costs.

And from the other side, the Magna bid needs to give GM in the US more of what it wants. But Magna has Russian backers who are going all out for a strategy that could help secure a sustainable auto industry in Russia. And it also wants the rights to Chevrolet models in Russia.

Who will be first to meet somewhere in the middle? It could drag on.

Incidentally, I got the chance to drive a Chevrolet Cruze today. Mind-boggling to imagine that vehicle possibly going head-to-head with the Astra in the future (in the Magna scenario, assuming 'separation' in most markets). What's it like? A bit plasticky inside (the hard plastic, that is) but it is a value brand product and is perfectly fine for the money. Myself and co-driver Mark Bursa have fairly different body shapes, but at least it comes with an adjustable steering wheel (took him ages to get comfortable...).