Particle.news
Download on the App Store
3 ARTICLES
·
3d ago

Magna Adapts to U.S. Tariffs with Cost-Cutting and CUSMA Compliance Push

The auto parts giant plans to offset $250 million in tariff costs by restructuring operations and increasing CUSMA-compliant parts, while reporting mixed Q1 financial results.

Magna logo is seen during Munich Auto Show, IAA Mobility 2021 in Munich, Germany, September 8, 2021. REUTERS/Wolfgang Rattay/File photo

Overview

  • Magna International has announced operational cost-saving measures, including restructuring and reduced spending, to address the financial impact of new U.S. tariffs.
  • U.S. Customs and Border Protection's recent guidance on CUSMA exemptions provides clarity and relief, aiding Magna's supply chain adjustments.
  • The company aims to increase the share of CUSMA-compliant parts for U.S. markets from 75% to 80%, requiring design changes and customer collaboration.
  • Magna reported a Q1 profit of $146 million, a significant year-over-year increase, but earnings per share missed analysts' expectations at 78 cents versus the projected 90 cents.
  • Projected tariff costs of $250 million for 2025 are expected to be passed on to customers, highlighting ongoing uncertainty in U.S. trade policy.