Auto parts gi­ant Magna con­cerned about pro­tec­tion­ist trade mea­sures

Cape Breton Post - - CLASSIFIEDS/BUSINESS -

Cana­dian auto parts gi­ant Magna In­ter­na­tional Inc. cited the rise of pro­tec­tion­ist trade mea­sures in the Trump era as a key risk to the auto in­dus­try as it re­ported its lat­est quar­terly re­sults.

Chief ex­ec­u­tive Don Walker said Fri­day any bor­der ad­just­ment tax im­posed by the United States would be neg­a­tive for the in­dus­try, but noted it’s still too early to tell what’s go­ing to hap­pen.

“The in­dus­try as a whole is try­ing to get all the facts to the right peo­ple so at least they un­der­stand what the im­pact might be,” he said dur­ing a con­fer­ence call with fi­nan­cial an­a­lysts.

“I think it will be quite a while be­fore we re­ally un­der­stand what the changes might be, what the im­pact would be, and noth­ing hap­pens overnight. But we are very closely watch­ing and hav­ing in­volve­ment in any dis­cus­sions.”

Magna (TSX:MG), based in Aurora, Ont., has op­er­a­tions in 29 coun­tries in­clud­ing the U.S. and Mex­ico.

In iden­ti­fy­ing some of its more sig­nif­i­cant risks in its quar­terly fi­nan­cial re­port, the global sup­plier said the auto in­dus­try is de­pen­dent on open bor­ders, par­tic­u­larly in Europe and North Amer­ica.

“The con­tin­ued growth of pro­tec­tion­ist sen­ti­ments and im­ple­men­ta­tion of mea­sures which im­pede the free move­ment of goods, ser­vices, peo­ple and cap­i­tal could have a ma­te­rial ad­verse ef­fect on our op­er­a­tions, prof­itabil­ity or re­sults of op­er­a­tions,” the com­pany said.

U.S. Pres­i­dent Don­ald Trump has said he wants changes to the North Amer­i­can Free Trade Agree­ment, com­plained about au­tomak­ers shift­ing pro­duc­tion to Mex­ico, and raised the pos­si­bil­ity of tar­iffs.

He has also pulled the coun­try from par­tic­i­pa­tion in the Trans-Pa­cific Part­ner­ship.

The moves in the U.S. come amid rum­blings in Europe where Marine Le Pen and her Na­tional Front are cam­paign­ing on prom­ises to get France out the euro and the Euro­pean Union.

Magna said Fri­day its profit for the last three months of 2016 amounted to US$478 mil­lion or US$1.24 per di­luted share, slightly up from a profit of US$476 mil­lion or US$1.17 per di­luted share in the same pe­riod a year ear­lier.

Sales in the quar­ter to­talled US$9.25 bil­lion, up from US$8.57 bil­lion.

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