GM said they were interested. Renault-Nissan said they had too much on their hands. Hyundai declined any interest. SAIC of China said no interest in anymore foreign buyovers. Here comes Magna International, to Chrysler’s rescue.
Magna International has always been on the lookout for Chrysler. On the eve of the Jeep Wrangler’s launch in August 2006, Chrysler found itself suddenly without a paint-shop supplier. Magna’s chairman Frank Stronach sent in a team from Magna Steyr, adding new equipment to the Toledi Supplier Park and helping Chrysler with talks with the UAW so that the Wranglers could roll off the assembly line on time.
This is of course understandable – 26% of Magna sales come from Chrysler. Total sales for 2006 was US$24.18 billion – 26% is about US$6.28 billion. That’s alot of money. Frank Stronach is also the highest paid auto parts manufacturer executive at US$33.3 million a year in 2005.
Hence as a move to protect it’s contracts with Chrysler, as well as help out a major customer, Magna starts to make it’s moves to buy over Chrysler, with Stronach confirming interest to US media today. But how will Magna buy Chrysler, a company with 2.5 times the revenue of Magna? What makes it worse is despite raking in that much revenue, it still posted a loss of US$1.5 billion in 2006.