Auto supplier Magna International Inc. ended 2009 with a net loss of $493 million due to a slumping auto industry, but executives said the company is putting more money into electronics and the hybrid and electric vehicle business because of expected growth in those product lines.
Magna, based in Aurora, Ontario, saw its sales drop to $17.4 billion in 2009 — a decline of 27 percent compared with the previous year, the company reported Feb. 25 in its annual financial results. (The company's results are reported in U.S. dollars.)
The biggest drop came in North America, where its sales fell to $3.4 billion, a 31 percent decline over 2008, the report said.
That decrease represents a severe cut in production throughout North America, including temporary shutdowns by two of its customers, General Motors Corp. and Chrysler Group LLC, as they underwent bankruptcy restructuring. Production did start to pick up again toward the end of the year, but the net loss compares to net income of $71 million in 2008.
Magna, which uses plastics for exterior body panels and interior trim, also spent $50 million in cash and another $86 million in assumed debt to buy two plastics operations — Cadence Innovation sro, the interior and exterior plastic parts company with three plants in the Czech Republic, and the composites operations of the former Meridian Automotive Systems Inc. of Allen Park, Mich., including molding and sheet molded composite sheet production in the U.S. and Mexico.
Magna did not disclose the value of those acquisitions previously, but noted the cost of them in the filing.
Magna said it has no plans for “significant acquisitions or divestitures” for 2010.
Despite the decrease in sales, Magna did manage to pick up business through re-sourced contracts moved to the company from its competitors.
It said it also continues to invest in innovation, especially to increase its capabilities and production footprint in electronics, which it considers an area of growth for both the industry and Magna.
Magna did not specify what products will be the focus of its future investments in electronics and hybrid vehicles.
Copyright 2010 Crain Communications Inc. All Rights Reserved.