Joe Friday

Magna International: Worth the Risk?

note that they are carrying about 4B in receivables, with close to half of those from the big three.
They have taken very little in the way of restructuring charges although the big three are off about 40% in total volume in the last year. I expect a big loss this quarter and large restructuring costs in the near future to bring their capacity in line wiht the new reality. There is likley to be a failure on the part of Chrysler and possibly GM as well. There are large restructuring charges and receivable write offs yet to to come. They do have 8B in shareholders equity, so they can take the hits that are coming, and remain in business, but the share price likely has some room to fall.