Magna Quietly Recovers Delphi's Fumbled Football
Canada's Magna International rarely makes headlines these days, unlike bankrupt suppliers Delphi and Plastech, and strike-afflicted American Axle. But the Quiet Canadian blew past rope-a-doped Delphi into first place in the US auto parts market, as reported in Automotive News [via the Financial Post]. A bit over a year ago Magna lost out to Cerberus in the war for Chrysler– and says a little prayer of thanks every night. So far, Magna has proven wrong those who say that unions and effective financial management cannot co-exist. After last November's deal with the Canadian Auto Workers (CAW), credit rating agency S&P said "Magna's ratings and outlook will not be affected by the agreement, which preserves key elements of Magna's unique culture and employee-profit sharing while keeping the union in check with a no-strike provision." At the time the CAW deal was a shocker because Magna boss Frank Stronach had been a staunch "we don't need no stinking unions" CEO. Recent supplier of the year awards from GM and PSA-Peugeot-Citroën point to a high level of customer satisfaction. Magna's most recent quarterly report reveals that sales are up while earning are slightly down. Is this a dead cat bounce, or can a North American-based auto parts supplier remain financially strong, unionized and productive all at the same time? And what's the bet Frank swoops down on Jeep or other bits of Chrysler when they file for C11?
Having worked in Purchasing for a number of years, Magna is the most annoying supplier to work with. Their tactic of "playing dumb" in negotiations is well documented. How Magna earns new business from anyone is due to the fact that they are in many cases the only financially strong company out there. Old Frank must have a pact with the devil.
truthbetold37: How are Magna's quality and delivery performances? Just because they are hard to beat at the negotiating table doesn't make Magna a bad supplier.
Picked up a fumbled football? Don't let them kid you, Delphi execs saw all the money availalbe for pilfering and threw it up in the air as hard as it could and lost sight of their goal. Magna was just being patient and caught it and ran. Delphi had so much going for it, they just didn't capitalize on it.
jthorner: Their quality and delivery for the parts I bought was not that great. They "sell" their great capability, but when they create their own problems they can't fix them and want the customer to pay. Believe me, I know what I am talking about.