Magna International Inc. lost more than $200 million US in the third quarter because of a dramatically deteriorating North American car sector, a situation that the auto-parts maker expects to get worse before it improves.

Aurora-Ont.-based Magna, which has more than 300 parts manufacturing and design facilities in 24 countries, lost $215 million, or $1.93 a share, as North America's automotive assembly sector built 18 per cent fewer cars and trucks in the July-to-September period compared to the same time last year.

Magna noted that the Big Three automakers fared even worse, seeing car and truck production tumble by 25 per cent.

Magna earned $155 million, or $1.38 a share, for the third quarter of 2007.

The company, one of the largest auto-parts makers in the world, said the global car assembly industry is unlikely to experience improved fortunes anytime soon. As a result, Magna will look for close facilities rather than open new ones, executives said.

"As a result of the extremely challenging conditions of the automotive industry in North America, including weakening automotive sales and vehicle production, it is necessary and prudent that we undertake further restructuring actions," said Don Walker, Magna's co-chief executive officer.

Magna took a $4-million charge in the third quarter as it shuttered a seat-making facility in St. Louis.

The company also said the rest of the year is likely to be more of the same.

3-month stock chart for Magna International Inc.

Magna now expects 12.8 million vehicles to be made in North America, a reduction of 11 per cent compared to the firm's earlier forecast. The prediction also represented the second time this year the company has cut its projection.

Magna reduced its estimates of European car assembly business, now set at 14.9 million vehicles, a cut of 4.5 per cent versus the company's initial projections.

Overall, Magna saw its revenue fall by nine per cent in the third quarter, slipping to $5.5 billion compared to $6.077 billion for the same time one year earlier.

Takes $258M charge

As a sign of the difficult times for the North American vehicle manufacturing business, in the latest three-month period, Magna took a $258-million charge, most of which is related to the writeoff of the firm's truck parts operations.

The company said its powertrain facility in Syracuse, N.Y., was worth less because of the precipitous slide in truck sales in North America.

Currently, North American vehicles sale are on pace to slide below 11 million units, 32 per cent less than the level last year.

Heavy truck sales look even worse. One industry estimate figured there will be 195,000 heavy trucks sold in North America this year, a 49 per cent drop versus the 377,000 sold two years earlier.

For the first nine months of the year, Magna's production volumes fell by 14 per cent in North America and three per cent in Europe compared to the first three quarters of 2007.

Magna said the company burned through more than $500 million in cash in the quarter, but still had access to $2.4 billion in cash. The ability of firms to get funds to run their operations has been a question during the current financial crisis.

To conserve cash even further, Magna sliced its dividend to 18 cents a share compared to the previous 36 cents.

Magna also said that, at the end of last year, the company had asset-backed commercial papers worth $134 million. In the third quarter of this year, those holdings were worth $79 million.