Magna is cuddling up to some very strange bedfellows

By Michael Hlinka, CBC business columnist:

There’s a saying: "Politics makes strange bedfellows." But when you look at the pairings that come out of the buyout of GM’s European Division, Opel, you have to think that the world of business looks like a swinger’s club by comparison.

There will be four new partners in this strangest of unions: GM and Sberbank of Russia, each with 35 per cent, Magna with 20 per cent of the new company, and Opel’s mostly German workforce owning the remaining 10 per cent through its union.

What’s the big deal?

Let’s start with Magna and Opel. When I googled "Frank Stronach and unions," one of the top searchs that came up read – and I quote – "A cornerstone of that culture is Frank Stronach’s anti-union ideology." End of quote. It doesn’t get much more in-your-face than that. Now, it’s true that a few of Magna’s Canadian operations are unionized. But this is under the condition that the workers can’t go on strike. This is Stronach’s M.O. I’m not sure that Opel’s workforce will be happy with it.

Yet, I’m not even sure that this is the most significant potential flash-point.

You may not be familiar with Sberbank. I wasn’t. It’s the oldest bank in Russia and its majority shareholder is … are you ready for this … the Central Bank of Russia.

In other words, Sberbank is really owned by the Russian government. Meanwhile, who controls General Motors? The company entered into bankruptcy protection yesterday. When it emerges the United States government will take a 60 per cent stake – which coincidentally, is exactly how much the Bank of Russia owns in Sberbank.

Okay, so the Russian and United States governments are in the car business together!

This is what I was referring to when I talked about possible conflict down the road. Governments are getting involved to secure high-paying jobs. But here's the paradox. Everyone agrees that there is immense over-capacity in world automotive production. Which means that there are going to be huge consolidations ahead. And that means fewer jobs - in both Europe and North America.

So what we've got is two zero-sum games at play. Either Frank Stronach will have his way and push around the German unions or organized labour will win out. Either automotive production will shift to Russia, which is clearly desired by the Russian government, or it will expand into the United States.

So for the time being, the four partners are sharing the same bed ... amicably … but sooner or later, someone’s going to be demanding all the covers, leaving everyone else out in the cold!

"We will get the taxpayer's money back."

So, the GM honchos apparently know, something we don't know, most likely that the banco-government will support the economy/clunkers at whatever cost in the mid term..