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Magna International Q2 Loss at $205 Million

Would be purchaser of Opel hit hard by declines at automakers.

by on Aug.07, 2009

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Total sales are off 45%.

Magna International Inc. (TSX: MG.A; NYSE: MGA) today reported that it lost U.S. $205 million in the second quarter and $467 million in the first half of 2009 as sales to major automaker clients plummeted.

The Canadian-based conglomerate, with 71,000 employees in 247 manufacturing operations and 86 product development and engineering centers in 25 countries, is an excellent barometer of the auto industry.

During the second quarter of 2009, vehicle production declined 49% to 1.8 million units in North America and 28% to 3.1 million units in Europe, each compared to the second quarter of 2008.

Also during the second quarter of 2009, Magna’s North American and European average dollar content per vehicle decreased 10% and 7% respectively, each compared to the second quarter of 2008.

Complete vehicle assembly sales by Magna decreased 60% to $423 million for the second quarter of 2009 compared to $1.1 billion for the second quarter of 2008, while complete vehicle assembly volumes declined 65% to approximately 14,100 units.

As a result of the “significant declines in vehicle production in North America and Europe, lower average dollar content per vehicle in these two markets, and decreases in assembly sales and tooling, engineering and other sales,” Magna’s total sales decreased 45% to $3.7 billion for the second quarter of 2009 as compared to $6.7 billion for the second quarter of 2008. 

Magna International Q2 2009

 

Three Months Ended June 30,

Six Months Ended June 30,

2009 2008 2009 2008
Sales $3,705 $6,713 $7,279 $13,335
Operating (loss) income  $(237) $319 $(467) $605
Net (loss) income $(205) $227 $(405) $434
Diluted (loss) earnings per share $(1.83) $1.98 $(3.62) $3.75
All results are reported in millions of U.S. dollars, except per share

(more…)

Magna and Russians Land Opel

Supplier was favorite of Germans and GM.

by on May.30, 2009

What role Opel will now play in GM's effort to form a truly global empire is uncertain.

What role Opel will now play in GM's effort to form a truly global empire is uncertain.

With weakened U.S. auto giant General Motors now coming down to the wire with an anticipated bankruptcy filing on Monday, the automaker has agreed to sell a majority stake in its ailing European Opel subsidiary to a consortium led by Canadian super-supplier Magna International.

The deal came hours after the other bidder in the battle for Opel, Italian automaker Fiat SpA, decided to boycott a meeting with German government leaders and others involved in the Opel rescue effort.  The government had pressured GM to agree to the sale before it would approve a bridge loan worth $2.1 billion.  The Germans will also provide another $420 million in short-term assistance, announced Finance Minister Peer Steinbrueck, to keep Opel running while the details of the sale are finalized.

When GM first announced it would need assistance to save Opel, it said it would be willing to relinquish a minority stake in the critical subsidiary.  But it later acknowledged it would be willing to become a minority shareholder, and the final deal will give Magna 20% of Opel and GM’s other European assets, while the Russian Sberbank will acquire another 35%, the same share remaining for GM.  Opel employees will control a 10% stake.

Subscribe to TheDetroitBureau.com“Opel has been given prospects for the future,” said German Chancellor Angela Merkel after the deal was completed. “Now the work for Opel and for Magna … really begins.”  Merkel had repeatedly said that the German government was neither interested nor willing to take a stake of its own in Opel – unlike the approach taken by the Obama Administration, which expects to wind up with 70% of the European unit’s parent, General Motors. (more…)