Quote from Kassz007:
Very nice Tryk. What do you think of Stronach's break even in three years, profitable in four prediction? If his plans go smoothly Magna could be a very good longer term play.
absolutely they will be profitable, but they won't show it on the books. they have to amortize losses on debt costs over 20 years at least. i'd say 4-5 years is a reasonable timeline to profitability if they have cars on the road in two years, especially for creating a new car company. especially if GM cars disappear or become specialised brands.
i don't think the auto industry has a choice. it's produce or die.
north america needs smaller, greener cars, and millions upon millions of them to replace the chokers. we needed them in 1973.
i think they will have massive investment costs reorganising gm plants, new robotics and entirely new green technology divisions, but that cost will be guaranteed by the canadian government, with unlimited funds for expansion at likely less than prime even as interest rates increase, refinancing of that debt down the road will probably be converted to new equity, new equity will raise even more capital, so on the debt side, magna is in a no lose scenario.
forcing the uaw down to a more reasonable wage level will be key, as will funding pensions be a high cost, but with the plants likely located in southern ontario (i.e. taking over the windsor and oshawa truck plants), health care costs will be significantly lower than in the united states.
until obama gets the canadian dollar to par so they can equate and integrate the privatization of the heath care systems between the usa and canada into one working model (privatization is as inevitable in canada as is socialisation in the usa. they will meet somewhere in between.), that cost will be the employment killer.
but i absolutely believe you will see smaller, lighter, faster, greener, more efficient cars coming out of magna.opel than we would have seen had the magna.opel not been brokered at the highest political levels.
we will see opel remain in europe primarily, but we will absolutely see magna cars on the road in north america competing with ford and the asians.
and i think they will be immensely successful. i would never bet on stronach. his daughter is as smart as her dad.
personally, if i were magna, i'd call up honda and have them send over 100,000 of their new ASIMOs to replace the UAW. those idiots fucked GM right over trying to play hardball with nothing to back it up.
i don't see why we need humans to build machines. machines should be building machines.
no health costs. replaceable. reprogrammable. no labor disputes. scalable. production capacity can be increased or decreased with the click of a mouse based on real time sales numbers.
total robotic automation integrated into the web, across the entire industry, not just at the manufacturing level, to a real time ecommerce model.
that's the future.
but i digress.
they'll probably go AI and kill us all.
i saw terminator: salvation last night. amazing movie. made me think of magna for some reason. is that going to come back to haunt me in the future or what?
rb.
