GM still seeking Russia deal with Magna

DETROIT, Nov. 8 (UPI) -- U.S. automaker General Motors says it is pushing ahead with plans to work with Canadian parts supplier Magna International Inc. on a Russian production deal.

Magna and its Russian financial backer Sberbank failed last week in their bid to obtain GM's Opel subsidiary. But a separate deal in which GM has been negotiating with Magna and GAZ, Russia's No. 2 automaker, to set up a three-way Russian auto production business is still ongoing, The Detroit News reported.

"I see us being able to pick up with Magna and GAZ and continue to try to develop this business -- but obviously now as part of a GM-retained Opel, not as part of a Magna-Sberbank consortium," GM Group Vice President John Smith, the chief negotiator of the Opel deal, told reporters last week.

Talks on such a deal began three years ago, but stalled after GAZ owner Oleg Deripaska encountered financial woes, followed shortly thereafter GM's own struggles and eventual bankruptcy.

Former head of GM Russia Warren Browne told the News he an arrangement can be worked out with the Russians, saying, "The end of the Opel deal does not preclude GM from continuing to help GAZ with Magna's support."