Mercedes sticks to Magna, gives gullwing body order

FRANKFURT Wed Oct 7, 2009 2:41pm EDT

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FRANKFURT Oct 7 (Reuters) - Magna International Inc MGa.TO received a prestigious order from Daimler (DAIGn.DE), its fifth biggest customer, in a sign of faith that it would not pull business from the auto parts supplier despite the Canadian company's planned Opel deal.

Magna said on Wednesday that its Steyr unit based in Austria's Graz -- where the rugged Mercedes-Benz G-Class SUV is built -- would develop and build the aluminum bodies for the upcoming Mercedes SLS AMG gullwing.

"We can be proud that we are the only supplier in Europe able to manufacture a body made only out of aluminum -- that underlines once more our leading position in challenging and innovative technologies," Magna Co-Chief Executive Siegfried Wolf said in a statement.

Aluminum is about a third lighter than steel while offering extreme rigidity, but it is also a more complicated material to use in cars than steel due to varying metallic properties. This requires different production methods for tooling, stamping, welding and painting.

The hotly anticipated super sports car that hits markets early next year is fitted with two doors that swing upwards for entry, resembling wings. This hallmark design became legendary in the 1950s when Mercedes launched the 300 SL sports coupe widely believed to be one of the most beautiful cars ever built.

Ever since the board of General Motors [GM.UL] approved a sale of a 55 percent stake in its European unit to a consortium around Magna last month, rival carmakers like Volkswagen (VOWG.DE) and BMW (BMWG.DE) have threatened to withdraw business from the supplier, since the Opel deal would make it a direct competitor.

Daimler CEO Dieter Zetsche told reporters during the Frankfurt auto show that he was not concerned, however.

"Magna has stated and confirmed again and again that they would have two totally separate organisations with Chinese walls. When you go to a bank, you have to rely on those Chinese walls as well.

"So if that is a smart step that Magna is taking is one question; does it prevent us from continuing our good business relationship with Magna, the supplier? Clearly no -- so I have no problem from that perspective with their decision."

(Reporting by Christiaan Hetzner; Editing Bernard Orr)

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