Canadian Firm to Make Interiors for GM Trucks

General Motors Corp. said it awarded a Magna International Inc. subsidiary a contract to supply the total interior for its next generation of full-size truck, an agreement an analyst valued at as much as $3 billion a year to the Canadian auto-parts company.

The contract would have Magna’s Intier Automotive Inc. eventually supplying interiors for almost 2 million vehicles a year, said Bo Andersson, GM’s vice president of worldwide purchasing. The biggest auto maker’s large pickups and sport-utility vehicles probably will be redesigned beginning in 2005.

“It’s a big validation of GM’s faith in Intier’s ability to deliver,” said Kenneth Blaschke, an auto-supplier analyst at Deutsche Bank Alex. Brown who estimated the contract’s value. “Intier has this big backlog because GM trusts what Magna has done in the past.”

A spokesman for Magna, Canada’s largest parts maker, couldn’t immediately be reached for comment.

GM has been contracting out the design and management of its vehicle interiors to cut costs and improve quality. The auto maker has outsourced the interior management of 75% of its vehicles, Andersson said at the North American International Auto Show in Detroit, which officially opens today. Until now GM has manufactured the interiors for its full-size trucks, he said.

Sales of GM full-size sport-utilities rose 29% last year to 537,193 and full-size pickup sales rose 18% to 979,706.

Magna sold about $63 million in Intier shares in an initial public offering in August and still retains voting control over the interior unit. Intier, which hasn’t yet reported full-year results, said it had $2.4 billion in pro forma sales in the first nine months of 2001.

Magna’s U.S. shares rose $1.76 to close Friday at $66.82; GM rose 74 cents to $50.09. Both trade on the New York Stock Exchange.

GM has awarded interior management contracts to other suppliers, including Lear Corp., Johnson Controls Inc. and closely held Venture Industries.

“It’s too early to say how successful we are but based on what we experienced, we see that things are going better,” Andersson said. “We have better control over what they’re doing .... There’s no finger-pointing because there’s just one company.”