A 46 per cent drop in sales and a $200-million US loss in the first quarter has driven auto parts giant Magna International to suspend its dividend to shareholders to preserve cash for its operations.
The 70,000-employee auto parts maker described the first quarter of 2009 as one of the most difficult in its 50-year history due to the unprecedented sales drop experienced by many of its customers, notably GM and Chrysler.
Magna disclosed that Chrysler, which filed for bankruptcy protection in the U.S. last week, represents 11 per cent of its sales. General Motors, working on a restructuring plan, accounts for 19 per cent of Magna’s business.
Magna founder Frank Stronach told shareholders Magna may have to further reduce its global workforce — down by about 14,000 since the start of last year.
