The automotive world has been abuzz with rumors and gossip since Daimler CEO Dieter Zeitche said his company would "consider all options" for the troubled Chrysler group. Most who heard the announcement took it as hanging a "For Sale" sign on the company.
Those following reports know that Magna International, Canada's biggest auto parts maker, has been eyeing Chrysler assets since the announcement.
But a problem has presented itself. The parts supplier deals with just about every one of the world's automakers- so owning Chrysler group would put them in an awkward place, competitively speaking. For instance, economies of scale could allow Magna to extract a higher profit from Chrysler built machines- and its other customers might be displeased.
Currently, Magna generates about $3 billion a year in revenues from parts supplied for Chrysler vehicles.
Business aside, thousands of jobs could be affected by whichever, if any, decision is reached.
Frank Stronach, founder of Magna, explains. "We have huge contracts with Chrysler, we have thousands of employees involved." He told the Globe and Mail "It's very important that we have a total understanding of what it is all about. You might say we have a fiduciary duty to our employees to take a look and see (if) we can find a solution."
He also stressed that it was too early to tell if a takeover of Chryslers operations will be the answer. "At this point, in order to know where everything stands, we naturally have to take a look at the facts and the data," he said. "Where it will go, nobody can predict. Our predicament will be we do not want to compete with our customers."
Magna officials will hear presentations at Chrysler's headquarters in Michigan over the coming days.
photo:DaimlerChrysler
Those following reports know that Magna International, Canada's biggest auto parts maker, has been eyeing Chrysler assets since the announcement.
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But a problem has presented itself. The parts supplier deals with just about every one of the world's automakers- so owning Chrysler group would put them in an awkward place, competitively speaking. For instance, economies of scale could allow Magna to extract a higher profit from Chrysler built machines- and its other customers might be displeased.
Currently, Magna generates about $3 billion a year in revenues from parts supplied for Chrysler vehicles.
Business aside, thousands of jobs could be affected by whichever, if any, decision is reached.
Frank Stronach, founder of Magna, explains. "We have huge contracts with Chrysler, we have thousands of employees involved." He told the Globe and Mail "It's very important that we have a total understanding of what it is all about. You might say we have a fiduciary duty to our employees to take a look and see (if) we can find a solution."
He also stressed that it was too early to tell if a takeover of Chryslers operations will be the answer. "At this point, in order to know where everything stands, we naturally have to take a look at the facts and the data," he said. "Where it will go, nobody can predict. Our predicament will be we do not want to compete with our customers."
Magna officials will hear presentations at Chrysler's headquarters in Michigan over the coming days.
photo:DaimlerChrysler