Magna wants EV car loans

OTTAWA, CANADA - Automotive entrepreneur Frank Stronach wants Ottawa to loan him hundreds of millions of dollars so he can start manufacturing electric cars in Canada for a world market in as little as three years.

Stronach met with reporters to show off an electric Ford car containing an electrical system developed by his company Magna, which is best known for its automotive parts production.

"About two and a half years ago we made a commitment to be in the electric car business in a very serious way," he said.

Stronach, who was vague on whether he planned to meet with Prime Minister Stephen Harper, envisaged that in six years about 15 per cent of all vehicles sold will be electric and in 12 years that will jump to 30 per cent.

"I am very confident that Magna will be amongst the leaders in selling and building electric cars," said Stronach, who is expected to soon take over General Motors' Opel subsidiary in Europe.

"We are not here for a grant... I would like to see that the first electric car facilities are in Canada. If could get a loan we know we could speed it up. We could make sure it's going to be in Canada," he said, adding he is being courted by several states in the U.S. and by European countries.

Stronach, who is even toying with the idea of building Opels in Canada within two years, said it will cost up to $300 million to get into electric car and battery production.

"First of all we'd like to supply all car companies with electrical systems but we also have the intention to build electric cars. So that's our intention and that needs a fair amount of money. And I hope maybe half of the money we could borrow under reasonable conditions."

The energized 76-year-old Stronach said a person doesn't have to be a "great scientist" to understand that the world's supply of oil is running out sooner than later.

He said Magna has signed an agreement with Kokum Lithium-ion Batteries to secure all the rights, present and future, giving the Canadian company the right to make the fuel cells because "we do not want to be subject by any other company that they could cut us off."

Meanwhile, in what Stronach described as the biggest move of his career, Aurora-based Magna reached a tentative deal to invest 300 million euros, or $470 million for a 20 per cent stake in Opel AG, GM's main operating unit in Europe.

Sberbank of Russia, which is Magna's partner in the deal, would hold 35 per cent while GM would retain 35 per cent. Opel employees would get the remaining 10 per cent in a deal that should close in two months.

The German government is providing $1.5 billion euros in loans to keep Opel alive and protect several plants and about 25,000 jobs in that country. Under Magna's agreement with GM to buy Opel, it is not allowed to sell Opels in the U.S. or China.

As an aside, Stronach told reporters that the federal and Ontario governments did the right things by kicking in a total of $10.6 billion to help out flagging General Motors.

"If they would have gone bankrupt and was sold in bits and pieces the spin-off effect may have been a few million jobs between Canada and the United States. Under the circumstances, I think it was the right decision to do," he said.