Business Blog: Hoover’s Business Insight Zone

Today’s Company of the Day is Magna International.

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Magna International is a magnum-sized player in the auto parts game. Although its Canadian automotive roots go back 50 years, Magna now supplies car and truck parts to manufacturers throughout Europe and North America. Mind you, these aren’t the sort of parts you’re likely to pick up at AutoZone, but rather major body, powertrain, and interior components. Through its various divisions, Magna produces body panels and bumpers, chassis systems, lighting, carpets, windows, seats and seating hardware, engines, and transmissions, as well as complete vehicle assemblies. The company’s largest division, Magna Steyr, assembles Mercedes-Benz, Saab, Chrysler, and Jeep vehicles for the European market. (In 2006 the parent company won 45% of its revenues — more than $10 billion — from customers in Europe.) Magna Steyr also reaches beyond the automotive industry by making components used in European Space Agency launch vehicles.

Although Magna International trades on the New York Stock Exchange, the Stronach family still controls it 50 years after chairman Frank Stronach founded the little tool and die company that later grew into Magna. In recent years, Magna has zigged toward acquisitions and growth while most North American car parts makers have zagged toward downsizing and, in many cases, outright failure. Magna draws most of its business from top car companies like Daimler, BMW, and Detroit’s Big Three, and over the years has succeeded in winning contracts to make or assemble more parts of cars for these gigantic clients. Magna has also engaged in a long string of acquisitions, in particular by buying parts-making operations from big car makers like Daimler and Porsche. It has also kept up a brisk pace of expansion into new geographic markets such as Russia. Moves like these have allowed Magna to thrive even as many of its peers and customers have fallen on hard times.

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