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Magna International

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Magna International Inc.
Company typePublic (NYSE: MGA)
(TSX: MG)
IndustryAutomotive systems, components and modules
Founded1957
HeadquartersAurora, Ontario, Canada
Key people
Donald Walker, co-CEO
Siegfried Wolf, co-CEO
Vincent J. Galifi, Executive VP & CFO
ProductsSee products listing.
Revenue$23.704 billion USD (2008)[1]
$328 million USD (2008)[1]
$71 million USD (2008)[1]
Number of employees
74,000 (Mar '09)[1]
Websitewww.magna.com

Magna International Inc. (TSX: MG) is a Canadian company based in Aurora, Ontario. It is Canada's largest automobile parts manufacturer, and one of the country's largest companies. It owns the successful Magna Steyr automobile production company of Austria.

The company was founded in 1957 by the Austrian-born Frank Stronach as Multimatic. This company merged with Magna Electronics in 1969, and the combined company became Magna International in 1973.

On May 30, 2009, it was announced that a deal had been reached to transfer General Motors Corporation (GM)-owned Opel and Vauxhall assets to a separate company majority-owned by a consortium led by Magna International.[2][3] Subsequently, however, the deal was placed in limbo as GM declared opposition to it while the German government supported it.[4] [5]

Magna also manufactures auto parts that are primarily supplied to GM, Ford Motor Company, and Chrysler LLC. In addition to the Big 3 U.S. automakers, Magna's major customers include Volkswagen, BMW and Toyota. In Europe, Magna Steyr holds contracts for the assembly of the Jeep Grand Cherokee, Chrysler Voyager minivan and BMW X3 SUV. Magna has a relatively minimal presence in Asia with just 3 manufacturing centres in South Korea, 1 in Kunshan, China and 2 engineering centres in South Korea and China.[6]

On September 10th, 2009 a deal was made by the consortium led by Magna acquired GM Europe, which includes Germany's Opel and the UK's Vauxhall. [7]

Acquisitions

Magna acquired 80% of New Venture Gear, once a joint-venture between General Motors and Chrysler, in September 2004, and combined it into Magna Powertrain. It assumed full ownership in 2007.

Magna purchased CTS Fahrzeug-Dachsysteme, the world's leading supplier of convertible roofs, from Porsche in November 2005.

The Sunday Telegraph (Psychic Division) in London reported January 7, 2008 that Magna International was on the short list of bidders to purchase Aston Martin Lagonda Limited from Ford Motor Company. Their bid was unsuccessful however, and the company instead went to a British consortium led by Dave Richards of Prodrive for £479 million.[8]

According to a NPR broadcast on March 23, 2007, Magna showed interest in acquiring the Chrysler division of DaimlerChrysler. However on 14 May, 2007, it was announced that Cerberus Capital Management had won the acquisition bid for $7.4 billion.

In April 2008, Magna's wholly owned subsidiary, Cosma International, announced that they were buying the Ogihara America Corp. stamping plant in Birmingham, Alabama, that makes parts for Mercedes-Benz and other automakers.[9]

General Motors Europe

Main article: General Motors Europe § New GM Europe

On May 26 2009, BBC online reported that German government is considering 3 proposals for acquisition of Opel and Vauxhall including a Russian-backed bid from Magna.[10] On May 29 2009, CNN online reported that Fiat has pulled out of Opel/Vauxhall acquisition talks leaving Magna as the only contender. [11] The German government later backed the deal.[12]

On 30 May 2009, it was announced that a deal had been reached to transfer GM's Opel assets to a separate company majority-owned by a consortium led by Sberbank of Russia (27.5%), Magna International of Canada (27.5%), and Opel employees and car dealers (10%). GM is expected to keep a 35% minority stake in the new company.[13][14] Less than a month later, however, GM indicated that it has not yet closed the deal with Magna and is considering other late bids, including one from Beijing Automotive Industry Holding Corporation. [15]

Magna's plans for Opel include attracting GM or third-party carmakers to build their cars and electric vehicles in Antwerp. [16] If Opel needed to reduce production of its own core models then any unused capacity could be used to manufacture vehicles for other carmakers. Inside sources close to Magna revealed that some of the possible third party carmakers include Ford and PSA Peugeot Citroen. [17]

It was announced on September 10th that GM had closed a deal with Magna for the sale of GM Europe,[18] with the approval of the German government.[19] With this move, Magna Chairman Frank Stronach aims to take Magna from its current role as a parts supplier to an expanded role as a global automaker that ranks “amongst the leaders in selling and building electric cars.” [20]

Operations

Magna employs 83,000 employees at 240 manufacturing operations in 24 countries around the world. Magna supports these operations with 62 engineering and R&D centres in 14 countries[6]. Its largest operations region is Canada with 61 manufacturing operations and 8 engineering centres.

Products and services

Magna's products and services include:

  • Automotive interior and closure components
  • Metal body systems, components, assemblies and modules
  • Exterior and interior mirror and engineered glass systems
  • Fascias
  • Front and rear end modules
  • Plastic body panels
  • Exterior trim components and systems
  • Greenhouse and sealing systems
  • Roof modules and retractable/convertible tops
  • Lighting components
  • Engine, transmission and fueling systems and components
  • Drivetrain components (New Venture Gear)
  • Complete vehicle engineering and assembly through Magna Steyr.
  • Aftermarket products (booster seats and deck sound/lighting systems)
  • Complete seating systems

Electric vehicles

Subsystems

It bolstered its efforts by buying a Michigan-based company that focuses on propulsion and energy management for electric vehicles. The company is developing an entire range of components for the car, from electric engines to heating systems, which are originally made to run off internal combustion engines (ICE). Its Electronics unit bought BluWav Systems LLC [21].

Electric vehicle development

Main articles: Electric vehicle and PHEV

Magna International Inc. has joined the race to develop a plug-in hybrid car and plans to have a prototype on the road in 2009 or 2010.[22] It could supply any or all of the electric vehicle's subsystems to a carmaker, and could also supply an electric vehicle concept.[23] This has changed after the acquisition of Opel and Magna can now offer the electric vehicle by itself.

A few months after a round of preliminary discussions with Ford Motor Company with regard to all-electric (BEV) vehicles, Magna made a surprise visit[24] to Ford in August 2008 to demonstrate a Ford Focus it had procured and converted to battery operation on its own time and expense.[25] The result was a contract to supply an electric drivetrain for the North American version of the 2011 all-electric Focus RV.[26] By August 2009, a team of Magna employees was working along with Ford engineers in Dearborn.[27]

Political connections

The firm is also known for its political connections, such as having former Premiers of Ontario on its board, as well as connections with numerous other former politicians. Some politicians who have had notable positions with Magna include Mike Harris and Brian Tobin, retired Premiers of Ontario and Newfoundland Labrador, respectively, and the latter also a once prominent federal minister. In 1988, Frank Stronach ran as a candidate for parliament for the federal Liberal Party, but was defeated.

In 2004, Stronach's daughter and former company head Belinda Stronach ran for the leadership of the Conservative Party. While she failed in her bid for the leadership of the party, she was elected in her riding (Newmarket-Aurora) in the 2004 federal election. In May 2005 she crossed the floor to sit in Paul Martin's cabinet for the Liberal Party of Canada. In the Federal Election of January 23, 2006 Belinda Stronach won the Newmarket-Aurora riding for the Liberal Party. She instead decided to sit the contest out, and on April 11, 2007 announced she would no longer run in the next election as an MP in parliament. She continued to sit as an MP until the fall of 2008.

On March 18, 2005, former United States ambassador to Canada and former Massachusetts Governor Paul Cellucci joined Magna as a vice-president of its entertainment division. Cellucci resigned his position on July 5, 2006.

Ontario "Magna budget"

Magna International has also been noted for its connections to the Ontario Progressive Conservative Party and the Ontario Liberal Party. In 2003, the Progressive Conservatives under Ernie Eves presented the provincial budget at a Magna plant leading to accusations that the government was violating centuries of parliamentary tradition. It is believed that this decision had a negative impact on the Progressive Conservatives in the next provincial election.

Corporate governance

Current members of the board of directors of Magna International are: William Fike, Manfred Gingl, Mike Harris, Edward Lumley, Klaus Mangold, Donald Resnick, Royden Richardson, Frank Stronach, Franz Vranitzky, and Siegfried Wolf.

The board of directors of the company formerly included Belinda Stronach. Siegfried Wolf's pay for the 2004 fiscal year was $4.78 million USD [3].

Sponsorships

From 1999 to 2008, Magna was the principal sponsor of FK Austria Wien, one of Vienna's two major association football clubs. During this time, the team was known as FK Austria Memphis Magna.

See also

References

  1. ^ a b c d "Google Finance - Company Profile for Magna International Inc".
  2. ^ http://www.tagesschau.de/wirtschaft/opelkonzept102.html
  3. ^ http://news.bbc.co.uk/2/hi/business/8074924.stm
  4. ^ http://www.autoweek.com/article/20090729/CARNEWS/907299995
  5. ^ http://www.bloomberg.com/apps/news?pid=20601109&sid=adQJXZIxMA_I
  6. ^ a b National Post, Tues Nov 13 2007, page FP6
  7. ^ http://news.bbc.co.uk/1/hi/business/8247971.stm
  8. ^ BBC News Article
  9. ^ Ogihara America sells local auto supply plant - Birmingham Business Journal
  10. ^ [1]
  11. ^ [2]
  12. ^ http://news.bbc.co.uk/1/hi/business/8074924.stm
  13. ^ "Germany picks Magna to save Opel". BBC News. May 30, 2009. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  14. ^ Weber, Tim (May 30, 2009). "Analysis: Opel's survival still at stake". BBC News. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  15. ^ http://www.theautochannel.com/news/2009/06/25/467151.html
  16. ^ http://www.reuters.com/article/businessNews/idUKTRE54S4GG20090529?pageNumber=1&virtualBrandChannel=10482
  17. ^ http://www.motorauthority.com/report-magna-considers-using-opel-to-build-cars-for-other-brands.html
  18. ^ http://news.bbc.co.uk/1/hi/business/8247971.stm
  19. ^ "Opel and Vauxhall to go to Magna". BBC News. 2009-09-10. Retrieved 2009-09-10.
  20. ^ http://earth2tech.com/2009/06/02/magna-moves-on-opel-gears-up-for-electric-car-bet/
  21. ^ http://www6.lexisnexis.com/publisher/EndUser?Action=UserDisplayFullDocument&orgId=101846&topicId=104970025&docId=l:873615076
  22. ^ reportonbusiness.com: Magna’s next car to be powered by electricity
  23. ^ http://www6.lexisnexis.com/publisher/EndUser?Action=UserDisplayFullDocument&orgId=101846&topicId=104970025&docId=l:873615076
  24. ^ http://blogs.thecarconnection.com/marty-blog/1018261_ford-and-magna-international-to-partner-on-electric-vehicle
  25. ^ http://www.detnews.com/apps/pbcs.dll/article?AID=/20090202/AUTO01/902020354/1148/rss25
  26. ^ http://money.cnn.com/2009/03/20/autos/ford_electric/index.htm
  27. ^ http://wardsauto.com/ar/ford_bev_marketing_090806/

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