Magna seeks Ottawa help for electric car
By John Morrissy, Financial PostJune 2, 2009
OTTAWA -- Fresh off his company’s acquisition of Germany’s Opel, Canadian auto parts magnate Frank Stronach was in Ottawa on Tuesday seeking federal funds to start building electric cars in Canada for sale within as little as three years.
"In 12 years we see 30% of all cars being electric. There will be very fierce competition in the world for that market, but I feel very strongly Magna will be among leaders," Mr. Stronach, the chairman of Magna International, said at a news conference adjacent to Parliament Hill, where a Ford Focus battery electric car being developed in partnership with Magna was on display.
"One of the main reasons I’m here today . . . is that I would like to see that the first electrical car facilities are in Canada. If we could get a loan we know we could speed it up. If we could get a loan, we could make sure it’s in Canada."
The first stage of that process would involve the production of lithium ion battery systems for electric cars. Mr. Stronach said the company has so far spent $200-million of the $300-million necessary to develop the project, although he refused to specify how much it is seeking from Ottawa.
Mr. Stronach said Magna had secured for $50-million the rights to lithium-ion battery technology developed by a South Korean manufacturer, saying the auto parts maker couldn’t wait the seven or eight years it would have taken to develop its own products.
Mr. Stronach said the company could begin mass producing battery systems, and entire electric cars, within three years.
In April, Magna announced a major push into electric vehicles through a strategic alliance with Ford Motor Co. to supply key components for a battery-powered vehicle.
Mr. Stronach also said Tuesday that the terms of Magna’s investment in German auto maker Opel from General Motors Corp. prevent it from selling Opel autos in the United States or China, although he expressed optimism that those terms could be revisited.
He forecast Opel would be profitable within three to four years.
GM sought bankruptcy protection in the U.S. on Monday, and has been divesting assets such as Opel as part of a broad restructuring. On Tuesday, GM announced it had entered into a deal to sell its Hummer brand, but did not provide details on who the buyer was or the price paid.
Mr. Stronach brushed aside questions about a possible purchase of the Saab or Saturn brands, saying: "We have to digest Opel. We’ll see how quickly that takes place."
Canwest News Service
© Copyright (c) National Post
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Magna is the kind of companies we are fortunate to have in Canada and by all means deserve every kind of 'bailout' or in this case investments and tax breaks to have their EV branch up and running as soon as possible. It is admirable that instead of waiting for a handout or the new battery tech become commonplace they bought that very
technology, not just a final product, like GM did with Volt, from Korea for $ 50 mil. of their own money and now are ready to manufacture
everything in house and thus create jobs. My bet it is LG Chemical's tech they acquired.
Now we all need to lay back and see how the Cons will fack it up and lose a fat chunk of the lucrative EV market...
