Beijing Auto, vying with Russia, keen on Opel

The bidding for General Motors Co.'s Adam Opel GmbH unit is taking on the timbre of a contest between the Chinese and the Russians, and Beijing Automotive Industry Holding Co. said it sees a possible acquisition of Opel as a centerpiece of its effort to gain global presence and to survive a looming consolidation of China's auto industry.

In an interview, a top executive of the Chinese company said Beijing Auto would aim to build Opel's brand in China if it wins the contest for the German company.

"We need to be more global," said the senior Beijing Auto executive, who is closely involved in the company's bid. "Opel is underrepresented" around the world," he said. Amid the current shake-up of the global auto industry, "you need to be a global player to survive," he said.

Beijing Auto so far hasn't publicly discussed its bid for Opel, which is up against two competing proposals. Beijing Auto's biggest rival for Opel is a Russian-backed consortium that already has a memorandum of understanding with GM, albeit a nonbinding one.

In May GM tentatively agreed to sell a majority stake in Opel and British sister brand Vauxhall to a group led by Canadian auto-parts supplier Magna International Inc. Magna's bid is backed by Russia's Sberbank Rossia and auto maker OAO GAZ Group.
 
Beijing Auto seeks global growth with its bid for GM's Adam Opel. Above, an Opel factory in Germany in March.
Technology transfer issues have raised concerns with both the Russian and Chinese bids. GM is concerned about what kind of access to GM's technology Sberbank and OAO GAZ might gain through Opel, according to a person close to GM's thinking.

Opel's powerful labor unions have voiced their support for a deal with Magna, while opposing a sale to Beijing Auto due to concerns about a possible technology transfer.

Beijing Auto is offering to invest €660 million ($921 million) for a 51% stake in Opel.

Magna's group is offering to invest at least €500 million in Opel and is seeking €4.5 billion in loan guarantees from the German government. Beijing Auto is asking for €2.64 billion in German government guarantees.

GM's agreement with Magna is nonbinding and people close to GM have said recently the U.S. company has stepped up talks with Beijing Auto after negotiations with Magna encountered some potential hitches. With Magna, intellectual property issues, and Chevrolet's future role in Russia still need to be clarified.