International giant Magna finally got its hands on an automaker. After the failed negotiations to buy back Chrysler, Magna is getting a European car manufacturer.
In the current climate Magna is certainly not out of the woods, as they have to virtually rebuild the entire lineup despite the recent introduction of the Insignia sedan and the Astra sub-compact car.
The financial crisis is hitting Europe badly, and the benefits of the vehicle recycling programs in countries like Germany and Spain will run out in the medium term, eventually plunging the manufacturer back into negative sales figures. Obviously, Magna can’t count on the strength of the Canadian market and even less on that of the U.S. one.
In addition, Magna doesn’t hold a majority stake and will at the very least be forced to consult with the Russian group before making any decisions that could reposition Opel and Vauxhall.
Magna founder Frank Stronach hopes to build cars in Canada and the U.S., however the lack of potential markets reduces the possibilities of such a route, as does the rise in manufacturing costs.
It’s good news for Opel, but not so for all the workers that will have to live with the cuts and closures to come, necessary to ensure future viability. Many sacrifices will have to be made.
Magna International’s financial health might take quite a blow with the number of investments that will have to be made before the company becomes profitable again, certainly not before several years.
At least we can now say that we have a Canadian automaker – it’s just a shame that no one here can get their hands on the cars, at least for now.
photo:Magna
In the current climate Magna is certainly not out of the woods, as they have to virtually rebuild the entire lineup despite the recent introduction of the Insignia sedan and the Astra sub-compact car.
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| Opel Insignia |
The financial crisis is hitting Europe badly, and the benefits of the vehicle recycling programs in countries like Germany and Spain will run out in the medium term, eventually plunging the manufacturer back into negative sales figures. Obviously, Magna can’t count on the strength of the Canadian market and even less on that of the U.S. one.
In addition, Magna doesn’t hold a majority stake and will at the very least be forced to consult with the Russian group before making any decisions that could reposition Opel and Vauxhall.
Magna founder Frank Stronach hopes to build cars in Canada and the U.S., however the lack of potential markets reduces the possibilities of such a route, as does the rise in manufacturing costs.
It’s good news for Opel, but not so for all the workers that will have to live with the cuts and closures to come, necessary to ensure future viability. Many sacrifices will have to be made.
Magna International’s financial health might take quite a blow with the number of investments that will have to be made before the company becomes profitable again, certainly not before several years.
At least we can now say that we have a Canadian automaker – it’s just a shame that no one here can get their hands on the cars, at least for now.
photo:Magna