Mending Fences

AURORA, Ont. — Ford Motor Co. and Magna International Inc. are deep in discussion about the cost of burying their oddball progeny, Lincoln Blackwood, Ward's is told.

“It will be a shared responsibility,” Magna CEO and President Belinda Stronach says in an exclusive interview.

Stronach offers no details of the talks, while Ford confirms only that they are ongoing. Neither side speculates on when an agreement might be reached.

At issue is Magna's role in engineering and building the luxury pickup's signature cargo box.

Mating the Magna-built composite component to Ford's PN96 platform proved nearly impossible in the early going, short-circuiting a planned 10,000-unit production schedule and temporarily severing Magna's relationship with the auto maker (see WAW — Mar. '02, p. 51).

Magna has since been restored to favored status in Dearborn and Stronach is quick to note her company's relationship with the auto maker remains “very good.”

The same could be said of the company's prospects for 2003. With cash in the bank, labor peace in its plants and a cautious expansion strategy backed by motivated managers, Merrill Lynch calls Magna the industry's “best supplier on an operational basis.”

Wall Street expects the Canada-based supplier will experience revenue and earnings-per-share growth this year, despite anticipated sluggish production schedules.

On the heels of two major acquisitions in 2002 — Donnelly Corp. and the Eurostar assembly operations in Austria — Stronach deflects any notion of a buying spree.

If there is growth through acquisition, she says, “It's got to be strategic. It's got to be something that complements one of our existing product lines.

“We're looking at a number of opportunities,” Stronach adds. “A company the size we are, there's always active discussion, yes.

“Magna is an extremely diversified company. … And we also have cash ($1.4 billion as of December) in the bank.”