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Karmann Japan Bought by Magna Steyr

Magna pursuing acquisitions of in spite of its own losses.

by on Feb.25, 2010

Mercedes-Benz CLK convertible by Karmann.

Magna Steyr, an operating unit of Magna International Inc., announced today that it acquired Karmann Japan Co. Ltd., a subsidiary of bankrupt Wilhelm Karmann GmbH, the convertible system and custom body assembly supplier.

Magna International concurrently reported that during 2009, its operating loss was $511 million, net loss was $493 million and diluted loss per share was $4.41, decreases of $839 million, $564 million and $5.03, respectively, each compared to 2008.

Magna posted sales of $17.4 billion for 2009, a decrease of 27% from 2008. This lower sales level was a result of decreases in North American and European production sales, complete vehicle assembly sales and tooling, engineering and other sales, partially offset by an increase in Rest of World production sales, according to Magna.

Magna Steyr is combining Karmann Japan with its current car top making operations there. It is now the leading convertible roof system supplier in Japan, a business that includes the Nissan 370Z Roadster and the Infiniti G Convertible. Magna Steyr Japan will be based in Shin-Yokohama, with production facilities in Yokohama and Tochigi.

Magna chief financial officer, Vince Galifi, said it is also close to buying Karmann’s roof operations in Germany and Poland, during an earnings conference call this morning.  

Magna has approximately 72,500 employees in 238 manufacturing operations and 79 product development, engineering and sales centers in 25 countries.

Volkswagen Ag is in the process of attempting to buy the land and machinery formerly belonging to Karmann at its Osnabrück, Germany, site in Lower Saxony. (Click Here.) Potential antitrust issues have been raised in Germany, since it would concentrate the industry.

Karmann, of course has a long history of building products based on VW vehicles, the most famous of which are the Karmann Ghia sports car and Volkswagen convertible. The company traces its roots back to 1901, when Wilhelm Karmann took over the factory of the coach-builder “Christian Klages” in Osnabrück. Custom body production started the next year.

VW plans to establish a new car-manufacturing subsidiary, and will begin vehicle production in Osnabrück in 2011. VW says this will create more than 1,000 jobs by 2014. Some 200 technicians will be employed starting next year to set up the vehicle project.

In a statement last November VW said, “employees and former employees of Karmann have extensive experience in the production of small series models, and this experience will be accessed in line with requirements.”

VW now also holds a 49.9% stake in Porsche by year end, and it will takeover the rest of the famed sports car maker by 2011.

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