CEO of auto supplier Magna flags systemic impact of auto tariffs

Suppliers like Magna were built around seamless cross-border trade, with investments made years in advance. (2 min. read)

Author

Marcus Amick
April 16, 2025

CEO of Magna International Swamy Kotagiri

The CEO of auto supplier Magna International, Swamy Kotagiri, certainly isn’t mincing words when it comes to the tariffs—but as the head of North America’s largest auto supplier, he has a different perspective than most. 

The details: At an Automotive Press Association event yesterday, Kotagiri compared U.S. auto tariffs to the three biggest industry disruptions of the past two decades—combined.

  • “If you look at ’08, ’09, because of the financial conditions—higher interest rates, people not buying cars—it was demand destruction,” Kotagiri said (via Detroit Free Press) 

  • COVID, by contrast, “was a shutdown,” while the semiconductor chip shortage led to “a lot of start-stops in the factories.”

  • Kotagiri adds that the impact of the levies is already evident, noting that “it’s a really complex situation.” 

That said, he’s certainly open to hearing a solid alternative perspective on how the tariffs play out for the betterment of the industry.

Why it matters: Suppliers like Magna were built around seamless cross-border trade, with investments made years in advance. Tariffs throw all of that into question—forcing suppliers to either absorb new costs or scramble to retool production footprints that were never meant to be highly flexible.

Between the lines: Kotagiri said that while automakers will bear the brunt of the impact of the tariffs when moving materials across the border, Magna and other companies in the sector will certainly be impacted.

  • Magna—which is based in Canada—had more than 12,300 people employed in Michigan as of January and supplies parts to every major automaker. 

  • It manufactures most vehicle components, spanning parts from electric drive systems to body panels, with 341 facilities in 28 different countries.  

What there’s saying: “There’s a lot that we do in all parts of the region. Our policy is looking at North America as a whole—the footprints of the (automakers) were set this way. If volumes are reduced, it has an impact. How do you spread a cost you’ve already invested?” added Kotagiri.

Bottom line: Kotagiri’s message is simple—when trade rules change, the investments already made don’t necessarily change with them.

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