Who’s really driving the rescue of Vauxhall?

It’s an axiom of auto-makers — as it is of most producers of goods — that they are squeezed between suppliers and customers. Upstream suppliers have options to reduce costs and improve profits while their customers downstream, the retailers, can set prices to suit their markets. Although the producer likes to think of himself as king, in fact his thankless task is to squeeze such profit as he can from the narrow margin between supplier and customer. So why, you may well ask, does Magna International, a Canadian supplier of vehicle components, unheard of to the British and European public, want to relieve ailing General Motors of the challenge of running Vauxhall and Opel?

In the motor industry in particular, suppliers are loth to be seen as competing with their customers. Automakers, who jealously guard their exclusive access to the market through contracted dealers, dislike suppliers with ideas above their station. Once in a while they’ve been allowed to stick their heads above the parapet. In the early 1980s, for example, when Fiat stopped making its X1/9 and 2000 Spyder sports cars, it gave coachbuilders Bertone and Pininfarina permission to build and sell the cars under their own brands.

Those two Italian companies are examples of businesses that have successfully produced branded products for the car industry over many years. Once a maker of cabriolets for Opel and Vauxhall, Bertone has fallen on hard times, while Pininfarina carries on as a producer for Ford, Alfa Romeo, Mitsubishi and Volvo. Karmann, long a supplier of complete cars to the German industry, recently filed for bankruptcy protection. In Austria, Steyr-Daimler-Puch, a joint-venture producer of cars for Chrysler, was bought in 1998 by none other than our new friends Magna.

That Magna made its first major European investment in Austria occasions little surprise.