Magna mulls plant in Germany

Up to 3,000 jobs could result from a "strategic partnership" with automakers.

Graz, Austria. While more carmakers are considering cutbacks in German production, Magna Steyr is looking at the acquisition of an automotive plant in the country.

"We would not be closed to appropriate consideration if one or another automaker was to have concrete proposals relating to a strategic partnership, Magna Steyr CEO Manfred Memmel said. Magna Steyr, based in Graz, is a unit of Magna International Inc. of Aurora, Ontario.

Due to unfavorable conditions in Germany and labor costs that are to 20 to 30 percent higher than in Austria, a new factory would only be conceivable if "it were tied to secure orders from at least two OEMs," Memmel said.

A workforce of between 2,000 to 3,000 employees would be required for a manufacturing site with "a capacity that would ideally be 150,000 units," according to Memmel.

Up to three automakers could turn over niche and peak-demand products to Magna Steyr. "By bundling a number of projects, a cost advantage of about 300 euros per vehicle (about $390 at current exchange rates) could be achieved," Memmel said.

Such a move would let automakers cut overcapacity and excess workers to reduce costs.

"In Japan, Toyota is showing us how it works," Memmel said. "The Japanese firm has contract assemblers take responsibility for about 1.5 million of the 7.5 million vehicles it produces each year and thus continually increases their efficiency and quality."

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