BOCHUM, Germany -- Magna International Chairman Frank Stronach said the economic crisis will last into next year unless governments take swift action to counter the downturn.
Stronach said the crisis would reach its worst by the middle of the summer if governments act in the next few weeks but if governments dont act for a few months, then we might reach the bottom next year.
Stronach said U.S. President Obama needed to act quickly.
I hope that President Obama will be able to see very soon what is the cause of the problem and so we can set up strong rules to make sure this never happens again, he said.
All governments were responsible for the financial crisis because they had failed to provide clear rules for financial institutions, Stronach said. If we had had better rules we would not be in this quagmire.
Stronach was speaking to Automotive News Europe on the sidelines of an annual conference organized by the Center for Automotive Research in Bochum, Germany, on January 28.
He said he is wary of an auto czar for the U.S. industry.
Said Stronach: Government is not able to run a business. This is only an interim solution for a limited period of time.
Stronach said Magna has been affected by the crisis and has cut production in line with falling orders from customers.
But he said the company had a strong balance sheet and cash reserves of about $1.5 billion.
Stronach said many suppliers were in trouble because they could not get loans from banks.
They need support so they can survive, he said. The OEMs have to pay the suppliers even if they are short of cash. Otherwise they will also go bankrupt.
Magna, of Aurora, Ontario, Canada, ranks No.3 in Automotive Newss list of the top 100 global suppliers with worldwide parts sales to automakers of $25.65 billion in 2007.