Vw to withdraw business from Magna if Opel take over is completed

Article by Christian Andrei, on August 26, 2010

In another case of a supplier transforming into a threat is Magna International's takeover of Opel with Russian partner Sberbank. Volkswagen said that it will withdraw business from Magna if the takeover pushes through.

Detlef Wittig, Volkswagen's head of sales and marketing, said that its business with Magna involves development know-how and so it cannot permit that this will get into the hands of a supplier that could use this in its own automobile company.

In fact, Volkswagen AG Chairman Ferdinand Piech has said he wouldn't want to see one of its major suppliers become a competitor.

In recent news, General Motors Co. agreed to sell to Magna and its partner, state-controlled Russian lender Sberbank, a 55% stake in Opel in a deal that is expected to be finalized by the end of November.

Magna, which will have operational control of Opel, claims that it will run its supplier and auto businesses separately with firewalls between the two. However, automakers continue to be worried that Opel would be able to access their technology.

BMW's head of production Frank-Peter Arndt had commented that it was a problem when a supplier became a competitor. He said that BMW would react when it sees a conflict of interest. BMW is Magna's second-biggest customer after GM.

Topics: vw, magna, opel

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