Magna Subsidiary Decoma to Close Toronto-Area Plant, Post $36 Million in Charges

Decoma International, a subsidiary of auto parts giant Magna International, is shutting down its anodizing plant just north of Toronto and posting $36 million in special charges for that move and restructuring in Europe. Decoma did not immediately disclose job cut numbers in a release Monday. Separately, Magna International said it expects the charges to reduce its own diluted earnings per share by about 22 cents in the fourth quarter.

From Canadian Press

CONCORD, Ontario — Decoma International, a subsidiary of auto parts giant Magna International, is shutting down its anodizing plant just north of Toronto and posting $36 million in special charges for that move and restructuring in Europe.

Decoma did not immediately disclose job cut numbers in a release Monday. Separately, Magna International said it expects the charges to reduce its own diluted earnings per share by about 22 cents in the fourth quarter.

About $20 million of the charges covers the closure of anodizing operations at the Anotech plant in Concord. Anodizing puts a protective coat on metal parts, using electrolysis.

Decoma is also recording a fourth-quarter charge of $16 million in Europe related to subsidiary Prometall’s metal trim assets and the extrusion assets at the Decotrim plant.

In Canada, anodizing work done at Anotech will be transferred to the Mytox and Rollstamp plants.

“As a result, the shutdown plan will not have a significant impact on the company’s overall consolidated sales, Decoma said Monday.

The writedown of Nanotech’s anodizing assets to salvage value is scheduled for the fourth quarter. The special charges include $3.6 million for severance costs.

In Europe, the impairment charge “is a result of losses that are projected to continue throughout the current business planning period as a result of existing sales levels and limited sales growth prospects,” the company said.

Decoma designs, engineers and makes automotive exterior components and systems, including bumpers, front and rear end modules, liftgates and running boards.

Decoma has about 16,000 employees in 52 plants in Canada, the United States, Mexico, Germany, Belgium, England, France, Austria, Poland, the Czech Republic and Japan.

Magna has approximately 81,000 employees in 219 factories and 49 product development and engineering centers in 22 countries.

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