Magna International, Canada's largest automobile parts manufacturer, wants to acquire a unit of one of its customers, German-based and GM-owned Opel. Among the other firms supplied by Magna are Ford, Chrysler, BMW, Volkswagen, and Toyota. But if they can't, they remain open to other avenues of cooperation:
The founder and chairman of Canadian auto parts supplier Magna could imagine another form of cooperation with General Motors Co if his planned deal to acquire German carmaker Opel fails. "We can always imagine that we would enter into a good cooperation with our customers," Frank Stronach told Reuters on the sidelines of an industry event.
They can also always imagine good cooperation with other customers.
"We were very close to sign a joint venture for the Russian market between [Russian automaker] GAZ, Magna and General Motors a year and a half ago, but because GM slid into insolvency the contract was not signed in the end," he explained.
It doesn't take to much imagine a partnership with Rus going ahead with or without GM, and with or without Opel. A rival in the bidding for is RHJ International, one subsidiary of which is the auto parts manufacturer Asahi Tec Corporation. The clear implication is that here is that these two auto parts suppliers pose a credible threat of forward integration into auto manufacturing. The weakened condition of GM in particular and the US auto industry more generally, adds to the power of these suppliers. For GM to not sell to to Magna now might preclude them from participation in other deals and joint ventures in the future, shut them out of certain markets, open the door to a competitor, and increase rivalry.
See also: GM Fears GAZ Competition.
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