* Q1 loss $1.79/share vs EPS of $1.78
* Revenue down 46 percent to $3.57 billion
* Suspends quarterly dividend
* Says auto industry conditions worst in decades (Adds quotes from AGM, details; in U.S. dollars unless noted)
By Euan Rocha and John McCrank
TORONTO, May 6 (Reuters) - Steep declines in global auto production pushed auto parts company Magna International Inc MGa.TO to a deeper than expected quarterly loss on Wednesday, but the company said its strong balance sheet positioned it well to emerge stronger from the downturn.
Vehicle production plunged 50 percent in North America and 40 percent in Europe during the quarter compared with a year earlier, putting a big dent in Magna's sales.
"I have been in the automotive business for over 50 years, and this is the worst automotive downturn I've ever witnessed," said Frank Stronach, Magna's founder and chairman.
Stronach made the comments at Magna's annual meeting where the company said it took a loss of $200 million for the first quarter, ended March 31, versus earnings of $207 million in the year-ago period.
Magna suspended its dividend to conserve cash and said it has shut down plants, laid off workers, and actively pursued takeover work to help offset the loss in revenue.
Don Walker, the company's co-chief executive, said that the situation is not set to improve in the coming months, with two of its biggest customers -- Chrysler, which recently entered bankruptcy protection in the United States, and General Motors Corp (GM.N) -- temporarily idling plants to reduce inventory.
"When Chrysler goes down for 30 to 60 days, then the day they go down, the supply base goes down. General Motors has announced a number of inventory reductions," he said at a press conference after the meeting. "It's inevitable that in the next couple of months, we're going to have to have layoffs because the assembly plants are down."
About 11 percent of Magna's first-quarter consolidated sales were to Chrysler and about 19 percent were to GM, its largest customer.
Vincent Galifi, Magna's chief financial officer, said it was too early to know if Magna would receive its money owed for parts from Chrysler, or from GM, which is also on the verge of creditor protection.
However, he said Magna was participating in U.S. and Canadian government insurance programs, which made him hopeful. "Where we sit today, I am a lot more comfortable that we are going to collect that money," he said.
While the situation for the entire auto industry is dire, Magna executives pointed out that the company is in much better shape than most of its competitors and that Magna was on the lookout for possible acquisitions.
The company confirmed it is in talks with GM and the German government regarding GM's Opel unit in Europe, but said it was too early to make specific comments on the subject.
"At this time, yes we are taking a look, yes, how can we participate, yes, how can we be helpful," said Stronach. "We are in the automotive business, we build cars, we take a look at everything."
Stronach dismissed recent media reports that the company was looking to buy no more than a 20 percent stake in Opel, saying Magna was not limiting its options.
Italy's Fiat SpA FIA.MI has also expressed interest in Opel.
Magna said it had $1.7 billion in cash at the end of the quarter, down $1 billion from a year ago, mainly due to the repayment of about $800 million on its outstanding lines of credit in February and March.
It said it had $1.8 billion available on its credit lines.
Stronach said that the difficult financial environment meant there were many "good deals" in the market that Magna was looking at many of them.
Magna lost $1.79 a share before exceptions in the quarter, compared with earnings of $1.78 a share a year earlier.
Analysts' average expectations were for a loss of $1.39 a share, according to Reuters Estimates.
Revenue was $3.57 billion, down 46 percent. Complete vehicle assembly sales were off 63 percent at $401 million, while complete vehicle assembly volumes fell 72 percent to about 12,043 units.
The company said the value of its parts in cars in North America rose 4 percent, while content per vehicle in Europe slid 4 percent.
Magna shares ended the day up 30 Canadian cents, or 0.7 percent, at C$43.42 on the Toronto Stock Exchange.
$1=$1.17 Canadian Editing by Rob Wilson