Magna ends hunt for automaker, eyes suppliers

AURORA, ONTARIO (Nov. 6, 3:15 p.m. ET) -- Magna International Inc., thwarted this week in its bid to take over General Motors Co.’s Opel unit, won’t seek to buy another car company, co-CEO Don Walker says.

“We are not looking at any more transactions in that space,” Walker said on a conference call late yesterday after the supplier posted its first quarterly profit in more than a year. “There are no discussions going on with any other vehicle-type acquisitions.”

After the Opel setback, Magna is turning its attention toward parts makers that have lost contracts from automakers that are favoring the most financially stable suppliers, Walker said.

“I’m surprised we have not seen more distressed suppliers,” he said.

Magna, North America’s largest auto supplier, reported net income of $51 million on sales of $4.67 billion during the third quarter. That compares with a $112 million loss on sales of $5.53 billion a year earlier.

Cost cuts helped Magna overcome a 20 percent decline in North American vehicle production and a 9 percent drop in European output during the quarter.

The profit was the first for Magna after four quarters of losses during the weakest auto market in nearly three decades. Before that, the Aurora, Ontario, company hadn’t posted a quarterly loss in 17 years.

Last quarter’s profit reduced Magna’s net loss for the year through September to $354 million, compared with a year-earlier profit of $219 million. Sales for the nine months fell to $11.95 billion from $18.87 billion in 2008.

John Wolkonowicz, an analyst with IHS Global Insight in Lexington, Mass., said he wouldn’t be surprised to see Magna in the hunt for another automaker.

“There are other auto companies available for sale, and he has this vision thing,” Wolkonowicz said, referring to Magna Chairman Frank Stronach. “ Stay tuned.”

Magna ranks No. 3 on the Plastics News list of North America's largest injection molders, with relevant sales of an estimated $1.2 billion.

Walker said it was unlikely Magna “lost any material business” during its months-long effort to acquire Opel.

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