Heavy costs for Magna due to the end of Fisker in Graz

Canadian auto supplier Magna International reported more sales and profits in the first quarter of 2024. But contracts to build entire vehicles, which take place in Graz, recorded a 15 percent decline in sales to $1.38 billion (1.29 billion euros). This has to do with the completion of construction of the Fisker Ocean electric vehicle. The first-quarter report said “depreciation and restructuring charges” related to Fisker cost Magna between $316 million and €294 million.

The risk of not having a Fisker anymore

The profit margin in the Complete Vehicles division also decreased from 3.2 to 2.0 percent. For the full year, Magna now expects sales of just $5 billion to $5.3 billion from the entire vehicle assembly, instead of up to $5.9 billion, and a €195 million advance payment from Fisker is still to be settled. Based on current expectations, Magna assumes that there will be no consolidation of Fisker vehicles, and shareholders are warned that there is a risk that Fisker will cease to exist.

Another 500 employees were laid off

Magna announced 500 job cuts in Graz ten days ago. As early as December 2023, the production line was converted from double-shift to single-shift. At the time, this was only supposed to be the case “temporarily,” but now he will remain working one shift for the time being. About 450 employees were affected in December, and now another 500 will follow, although Magna appears to still be trying to place some of them in other areas.

Sales for the entire group rose from $10.7 to $11 billion in the first quarter of 2024 compared to the same period last year. Sales growth was particularly strong in China (plus 11%). Sales were 2% higher in North America and 2% lower in Europe. Operating earnings (adjusted EBITDA) increased from $449 to $469 million. The company distributed profits amounting to $134 million.