Despite Porsche Contract, Magna Stock Hits Seven-Year Low
We reported yesterday that Canada's Magna won a bid to build Boxsters for Porsche at it's Magna-Steyr plant in Austria. The Canadian Press [via News 1130] reports that Magna's exposure to the miserable American market trumped the Porker news, driving Magna's stock to a seven-year low. Some 53 percent of Magna's sales come from its supplier business with the D2.8; the OEM's misfortune is being passed down the supply chain. Higher gas is hurting Magna's business on the demand side, higher steel and plastic prices are hurting on the cost side, and there's no end to the hurting in sight. Magna's purchase of Plastech's exterior manufacturing business means even more D2.8 exposure, on top of the inevitable issues that come from buying a basketcase. Last week Magna cut 400 jobs from its St Thomas, Ont pickup frame manufacturing plant. There's not much else they can do besides weather the storm, and hope that their "most financially attractive offer" to Porsche wasn't a bridge too far.
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