General Motors Co. appears to be moving toward completing one divestiture key to its ongoing restructuring even as another sale faces fresh uncertainty.
Entrepreneur Roger Penske's auto dealer company
should formally close on its deal for GM's Saturn brand on Wednesday, according to the Detroit Free Press, meeting the target date set by the companies when they announced the tentative deal back in June. The sale, which will save the brand and 350 dealerships from getting chopped, calls for GM to continue to make Saturn vehicles for two years while Penske works out a sourcing agreement with a third-party manufacturer.
GM management was under pressure to find a buyer for Saturn and avoid the negative backlash from shuttering the brand. But the sale denies the U.S. industry a chance to quickly trim some of its overcapacity, which would only have been possible if Saturn was closed down. Instead GM in selling the brand is creating a potential new rival in the ultra-competitive midsized sedan space.
While Saturn moves forward, a larger, higher-profile deal continues to sputter. The Wall Street Journal reported that
GM's planned sale of its European Adam Opel GmbH unit to a group led by Magna International Inc. (NYSE:MGA) faces fresh doubts as Spain urged regulators on the Continent to investigate the agreement and Germany's Free Democrats party, a critic of the transaction, looked set to gain strength after the country's recently completed election.
The Opel sale has faced hurdles all summer, with the German government keen on saving jobs in the country and pledging considerable financial support to the Magna bid despite GM's interest in a rival offer from private equity firm RHJ International SA. German Chancellor Angela Merkel pledged €4.5 billion ($6.6 billion) in loans to back Magna's bid, promises that were criticized by the Free Democrats and now have Spain complaining that the Germans are buying jobs in their country at the expense of Opel factories elsewhere.
It is difficult to say how much traction these complaints will have, but HIS Global Insight analyst Tim Urquhart told the Journal "this deal is not as near to completion as many people are trying to present." A U.S. auto source on Tuesday reiterated GM's position from when the deal was announced last month: The parties believe the remaining obstacles can be hammered out. -
Lou Whiteman
Lou Whiteman is a senior writer covering the automotive, transportation and industrial sectors. Follow him on Twitter @louwhiteman
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