James Telfser discusses Magna International
TORONTO - Shares of Magna International Inc. rose more than eight per cent by mid-day Friday, after executives said the auto parts maker can grow despite a computer chip shortage plaguing the auto industry.
"With respect to the semiconductor shortage, we see near term disruptions to (manufacturers') production. However, at this point, any shortages is expected to be made up by the end of 2021," said Chief Finacial Officer Vincent Galifi on a conference call with analysts.
This year's semiconductor shortage has led several auto companies, such as Stellantis and General Motors, to idle Canadian plants for periods of January or February. It comes on the heels of other recent assembly line stoppages in North America, after 2020's COVID-19 pandemic shut down production last year, and union workers' strike in the U.S. in 2019.
But new chief executive Seetarama Kotagiri, who was previously Chief Technology Officer and took over as top boss on Jan. 1, hinted that Magna has a high-tech investment strategy as auto makers have announced lofty commitments on electric vehicles, and technology companies like Apple are reportedly deepening their auto expertise.
While Kotagiri sidestepped a question directly about making a car for Apple, he noted that electric vehicle company Fisker is not the only upstart on Magna's radar. As it builds an electric vehicle with Fisker, Kotagiri said the company is keeping its eye on universities and early-stage companies as some car technology start-ups see ballooning valuations. Kotagiri also said that the company "booked a lot of business" in 2020, pointing to the company's work on electric vehicles and LiDAR, a technology used in self-driving cars.
"I think the push towards electrification... definitely has accelerated compared to what we've seen," said Kotagiri. "Overall, we actually see this as an opportunity going forward. And not even talking about the new entrants and others that are able to contemplate entry into the market."