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UPDATE: Kremlin Surprised By GM's "Political" Opel Pullout
(Adds further comments from Putin spokesman, Deripaska's Magna.)
By Will Bland
Of DOW JONES NEWSWIRES
MOSCOW -(Dow Jones)- General Motors Corp.'s (GM) decision to retain its European unit is "genuinely surprising," and the spurned bidders, Canada's Magna International Inc. (MGA) and Russian state-controlled OAO Sberbank (SBER.RS), will scrutinize the legal basis for the pullout, Dmitry Peskov, a spokesman for RussianPrime Minister Vladimir Putin said Wednesday.
"The Russian government supported and will continue to support this deal" to sell Opel/Vauxhall to Magna and Sberbank, Peskov said. "Even if it doesn't take place, the government has serious plans to restructure and modernize auto manufacturing."
Sberbank, Russia's biggest bank, and Magna were each prepared to commit EUR500 million for equal stakes of 27.5% in Opel. Russia's second-largest car maker OAO GAZ Group (GAZ.RS), controlled by billionaire Oleg Deripaska, was an industrial partner to the bid.
"Our interest was based on our desire to increase our presence in the passenger car segment," a spokeswoman for GAZ said Wednesday. GAZ, which produces mostly vans and mini buses, is working on joint projects with GM, she said, declining to elaborate.
The problematic deal with Opel, with its international political overtones, is wrapped up in the "superstitions of the U.S. State Department,"Deripaska earlier told the Russian press. The State Department has denied Deripaska a visa to visit the U.S., although he visited the country recently in cooperation with the Federal Bureau of Investigation and met with Detroit executives.
A Sberbank spokeswoman said the bank couldn't immediately comment on the GM decision on Opel but added that a statement would be released shortly.
"The motivation, it seems to me, is very simple: to keep Opel within the zone of political and economic influence of American business and American politics," said Oleg Morozov, deputy head speaker in the lower house of Russian parliament for Putin's United Russia party.
Privately, Russian officials warned that the collapse of the Opel deal could have repercussions for GM's operations in Russia, with other countries' automakers getting business from the Kremlin, as it seeks to modernize the industry, Interfax reported.
Russia's biggest automaker, OAO AvtoVAZ (AVAZ.RS), is working with France's Renault SA (RNO.FR) and Japanese sister company Nissan Motor Co. Ltd. (7201.TO) to produce new, modern car models starting in 2012.
Russian auto demand has dropped by half in the past year after unemployment jumped and bank credit dried up amid the country's first recession in a decade.
-By William Bland, Dow Jones Newswires; +7 495 937 8445; william.bland@dowjones.com
(William Mauldin contributed to this article.)
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=Qbya3brx0WJJJn5dIJcL1g%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
November 04, 2009 09:58 ET (14:58 GMT)
Copyright (c) 2009 Dow Jones & Company, Inc.
By Will Bland
Of DOW JONES NEWSWIRES
MOSCOW -(Dow Jones)- General Motors Corp.'s (GM) decision to retain its European unit is "genuinely surprising," and the spurned bidders, Canada's Magna International Inc. (MGA) and Russian state-controlled OAO Sberbank (SBER.RS), will scrutinize the legal basis for the pullout, Dmitry Peskov, a spokesman for RussianPrime Minister Vladimir Putin said Wednesday.
"The Russian government supported and will continue to support this deal" to sell Opel/Vauxhall to Magna and Sberbank, Peskov said. "Even if it doesn't take place, the government has serious plans to restructure and modernize auto manufacturing."
Sberbank, Russia's biggest bank, and Magna were each prepared to commit EUR500 million for equal stakes of 27.5% in Opel. Russia's second-largest car maker OAO GAZ Group (GAZ.RS), controlled by billionaire Oleg Deripaska, was an industrial partner to the bid.
"Our interest was based on our desire to increase our presence in the passenger car segment," a spokeswoman for GAZ said Wednesday. GAZ, which produces mostly vans and mini buses, is working on joint projects with GM, she said, declining to elaborate.
The problematic deal with Opel, with its international political overtones, is wrapped up in the "superstitions of the U.S. State Department,"Deripaska earlier told the Russian press. The State Department has denied Deripaska a visa to visit the U.S., although he visited the country recently in cooperation with the Federal Bureau of Investigation and met with Detroit executives.
A Sberbank spokeswoman said the bank couldn't immediately comment on the GM decision on Opel but added that a statement would be released shortly.
"The motivation, it seems to me, is very simple: to keep Opel within the zone of political and economic influence of American business and American politics," said Oleg Morozov, deputy head speaker in the lower house of Russian parliament for Putin's United Russia party.
Privately, Russian officials warned that the collapse of the Opel deal could have repercussions for GM's operations in Russia, with other countries' automakers getting business from the Kremlin, as it seeks to modernize the industry, Interfax reported.
Russia's biggest automaker, OAO AvtoVAZ (AVAZ.RS), is working with France's Renault SA (RNO.FR) and Japanese sister company Nissan Motor Co. Ltd. (7201.TO) to produce new, modern car models starting in 2012.
Russian auto demand has dropped by half in the past year after unemployment jumped and bank credit dried up amid the country's first recession in a decade.
-By William Bland, Dow Jones Newswires; +7 495 937 8445; william.bland@dowjones.com
(William Mauldin contributed to this article.)
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=Qbya3brx0WJJJn5dIJcL1g%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
November 04, 2009 09:58 ET (14:58 GMT)
Copyright (c) 2009 Dow Jones & Company, Inc.
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