Magna Soon Without Mini

by Bertel Schmitt

October 2nd, 2012 10:21 AM

Are you a short seller who is on the hunt for companies that are worse off than European carmakers? Look for parts makers that are also in the contract manufacturing business. OEMs may lose sales, but contract manufacturers lose whole contracts when manufacture is brought in-house by OEMs. Magna is likely to lose the contract with BMW to build the next generation of Mini cars, says Reuters.

Austrian Magna Steyr produces the Mini Countryman and will begin producing the Paceman later in the year, but possibly not for long.

“We let Magna Steyr produce the Countryman and the Paceman, but in the mid-term we are looking at concentrating Mini production in two locations, namely Oxford and NedCar,” a BMW spokesman told Reuters.

#BertelSchmitt #BMW #Magna #MINI

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6 comments

-Cole- on Oct 02, 2012

But why?

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D in the D on Oct 02, 2012

With all the European overcapacity, this probably is real bad news for Magna, but I disagree with this one as a short candidate. Magna has one of those family share classes, where the family holds all the important shares, and the public really has only a small stake in the company, ever. Selling it short, or expecting much gain out of this one isn't going to happen unless you're on the inside.

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- Robert.Walter on Oct 02, 2012
  
  Just look to the history of where crazy Frank sold his stock, and tried to manipulate the deal but the counter parties realized he was screwing them... Scuttled the deal... Iirc deal finally went thru but with a more reasonable payout to mr megalomaniac...
  
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- Sprocketboy on Oct 03, 2012
  
  A few years ago I was considering purchasing Magna shares but was put off not only by who was on the Board of Directors (mainly retired politicians who would never say no to Frank) and the share structure but also by the shifting of assets from the auto business to Frank's race horse hobby. Eventually after shareholder protests it was turned into a separate company, Magna Entertainment, that went bankrupt in 2009. I was thinking the term used by a poster here of "Mr. Megalomaniac" a bit rich but now I see that in his just-announced run for the Austrian Presidency his newly-formed party is named "Team Stronach for Austria." At least Magna is still bolting together those Aston-Martin Rapides and VW-Bentley sedans in Austria.
  
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Ranwhenparked on Oct 02, 2012

BMW kept the wrong factory - Plant Oxford (Cowley) is running at capacity and is all hemmed in with no real room for expansion, while most of the still-sprawling Longbridge complex lies vacant. They should have taken the bigger plant when they had the chance, but, then 12 years ago, who would have really predicted MINI would be as big a success as it is?

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- Robert.Walter on Oct 02, 2012
  
  Gabriel Rees, the Uk equivalent of David cole, also with a university center for auto research, and just as inaccurate with his forecasts, predicted that mini would sell so few cars that BMW would not recover its investment before, at earliest, the second generation... Mini sold twice the number Rees predicted and was profitable in a couple of years...
  
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