Howes: Russian power play stalls Opel talks

A federal bankruptcy judge has green-lighted creation of a "new GM," which could emerge as early as Thursday. But the real Great Power drama in the dismemberment of General Motors Corp. is out East -- Far East.

Russian Prime Minister Vladimir Putin's Kremlin ally, Sberbank, is in the final stages of talks to acquire a controlling 35 percent stake in GM's Adam Opel GmbH unit in Germany and, in theory, gain control of Opel's access to the intellectual property of GM. Imagine the possibilities for an empire builder like Putin if a Russian automaker, and its future partners, won rights to GM's technology trove.

That's one reason GM's talks with Sberbank and Magna International Inc. are encountering difficulty, according to two sources close to the situation. GM cannot allow a foreign rival, its would-be partners and their "friends" in an autocratic government access to the intellectual property undergirding its global product portfolio from Detroit, Ruesselsheim and Sao Paolo to Moscow, Beijing and Delhi.

Another reason: Chevrolet. Of the 350,000 or so vehicles GM sold Russians last year, roughly 90,000 carried Opel badges. The balance were Chevy-brand vehicles assembled in St. Petersburg, Kaliningrad, Ukraine and GM's joint venture with AvtoVAZ in Togliatti -- many of them built from kits shipped by GM's Daewoo Automotive Technologies in South Korea.

Just asking, but if a consortium of Sberbank, Magna, GM and Opel's employees own Opel with backing by the German government, would production and sales of Chevys in Russia remain with the new GM? They should, if Chevrolet is a cornerstone of the new GM and if the new GM is determined to remain a player in global growth markets.

China, a historic Russian antagonist, is in the game, too. Beijing Automotive is preparing to make a formal bid for Opel, a linchpin of GM's global product development. Gaining control of Opel would buy the Chinese instant credibility and would deprive fledgling Russian rivals the play for respectability they so badly want as their consumers steadily push Russia toward top-tier status in global auto markets.

Great Power politics? You bet, with more than two rivals vying for the German assets of an American automaker. There have been Italians of Fiat SpA; the Austrians and Canadians of Magna; the Germans, desperate to retain the Opel jobs with as little cash outlay as possible; and the British and the Belgians who have little hope of saving their costly pieces of the GM empire.

But the real battleground is Russia, among the fastest-growing markets on the Eurasian land mass whose buyers are on track to consume roughly 3.5 million cars, trucks and vans a year. In GM's talks over Opel, Russia and who will control what of GM's expanding empire there looms large -- and whether the tiny Russian players of GAZ and AvtoVAZ can get a piece of the action.

"The importance of Russia has taken on strategic significance," says Warren Browne, former executive director of new business development for General Motors Europe and a former managing director of GM Russia. Retired in March, he now heads his own consulting firm.

"It'll be a profitable, large market -- one of the top three. The Kremlin wants AvtoVAZ and GAZ to combine and create a serious automotive player and Sberbank was going to be the vehicle to get it done."

It still may be. GAZ, controlled by Kremlin friend Oleg Deripaska, makes a successful play for a respected global auto exec, GM's purchasing boss, Bo Andersson. Sberbank Chairman, German Gref, suggests a possible merger between the two. And Sberbank, allied with GAZ, is angling for access to GM's global intellectual property.

Who says the Soviet Union is dead? Only the naifs who don't recognize power politics for what it is and what it wants.

dchowes@detnews.com">dchowes@detnews.com (313) 222-2106 Daniel Howes' column runs Tuesdays, Thursdays and Fridays.