Auto parts maker Magna takes first hit from Canada Bridge blockade


The Magna logo is seen during the Munich auto show, IAA Mobility 2021 in Munich, Germany, September 8, 2021. REUTERS/Wolfgang Rattay

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Feb 11 (Reuters) – Auto parts maker Magna International Inc (MG.TO) said on Friday disruptions at the Ambassador Bridge caused by protests by Canadian truckers over coronavirus mandates have begun to have an initial impact on its operations .

Protesters, who have been causing a stalemate in the Canadian capital since late January, have been using their big machines since Monday to rumble through traffic on the bridge, which serves as a supply route for Detroit automakers.

The situation on deck has forced some customers to idle or reduce production requirements, Magna chief executive Swamy Kotagiri said in an earnings call.

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“If the standoff lasts any longer, it could affect large Canadian suppliers such as Magna and Linamar Corp (LNR.TO) and it could affect Magna’s numbers in the (current) quarter,” said Sam Fiorani, Vice President of AutoForecast. Solutions LLC.

Magna’s U.S.-listed shares fell nearly 4.3% to C$77.42, while its Toronto shares fell 4.4% to C$98.50.

Toyota Motor Corp (7203.T), General Motors Co (GM.N), Ford and Chrysler’s parent company Stellantis (STLA.MI) said they were forced to cancel or reduce some production in reason for the protests. Read more

The protests have increased pressure on a North American auto industry struggling with a fragile supply chain and a global chip shortage that has wreaked havoc on production since the pandemic hit.

Magna reported a 13.7% drop in fourth-quarter net sales to $9.11 billion, but beat analysts’ estimates of $8.95 billion.

In terms of headwinds, expect continued semiconductor supply constraints to impact production in 2022, CEO Kotagiri said on the call.

However, the company expects semiconductor availability to have a bigger impact on production in the first half.

The Ontario-based company estimated its full-year revenue at $38.8 billion to $40.4 billion, up from $36.24 billion for 2021.

Analysts on average had expected $39.47 billion, according to Refinitiv IBES data.

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Reporting by Shivansh Tiwary in Bengaluru; Editing by Sriraj Kalluvila

Our standards: The Thomson Reuters Trust Principles.


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