You know the economy is bad when...

Auto parts maker Magna posts 3rd-quarter loss, cuts sales forecast, slashes dividend
Tuesday November 4, 6:37 pm ET By Bree Fowler, AP Auto Writer

NEW YORK (AP) -- Canadian auto parts maker Magna International Inc. said Tuesday it lost $215 million in the third quarter, citing a continued decline in North American vehicle production that spread to European markets. It cut its full-year sales guidance and slashed its dividend, saying it doesn't expect demand for cars and trucks to improve anytime soon.

Magna's results come a day after automakers reported their October U.S. sales that fell a combined 32 percent from a year ago to the lowest total in more than 17 years.

The news sent Magna shares down 39 cents, of 1.1 percent, to $33.99 in New York trading Tuesday, after tumbling as low as $31.16 earlier in the session. Over the past 52 weeks, the company's shares have traded between $28.28 and $99.38.

In addition, in order to offset the resulting drop in sales, Magna is taking a number of steps to cut costs and become more competitive including the 50 percent reduction in its quarterly cash dividend to 18 cents and a review of all of its cash spending.

The cost cutting efforts should help put Magna in a position to take advantage of consolidation in the industry and pickup key businesses from auto suppliers that aren't able to survive the downturn in the industry.

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That isn't going to be fun in the short term, but the long term will be good. (For those of you who don't know, Co-Ex-Tec, where Gary and I work, is a division of Magna).