Magna chairman and founder Frank Stronach takes a call at the company's Aurora, Ont., headquarters.J.P. MOCZULSKI
One of Canada's biggest corporate personalities, Frank Stronach founded what is now Magna International Inc. in a Toronto garage in 1957 and led it to the top ranks of the world's auto parts makers.
More than 50 years later, Mr. Stronach is preparing to cede voting control of Magna. Officials announced on Thursday that the company is proposing to eliminate the dual-share structure that has allowed the founder and chairman to maintain control of the firm with just a fraction of its equity.
A dominating force for 40 years, Mr. Stronach has been called both a visionary and compared with Cuban dictator Fidel Castro.
Last year alone, the entrepreneur made an unsuccessful bid to buy a car company, helped steer his auto parts giant through a massive industry crisis, watched his racetrack company, Magna Entertainment Corp., fall into Chapter 11 bankruptcy protection and mused about plans to build a theme park in Austria.
Long one of the country's highest-paid executives, the 77-year-old also took a pay cut in 2009. He received $1.9-million in total compensation from Magna International, down from $10.8-million in 2008 and $40.5-million in 2007.
After arriving in Canada from his native Austria with $200 in his pocket, Mr. Stronach worked picking up golf balls at a driving range and as a machinist. Three years later, he rented a garage in downtown Toronto and opened a tool-and-die shop called Multimatic, sometimes sleeping in the store as he built the business. His first-year sales were $13,000. In 1960, the company received its first auto parts contract - with General Motors - to produce metal-stamped sun visor brackets.
In 1969, Multimatic merged with Magna Electronics Corp., an aerospace, defence and industrial components manufacturer. Annual sales reached $4.4-million (U.S.). The company later changed its name to Magna International and expanded its auto parts empire. By 1987, Magna had 107 auto parts plants in North America and one in Europe. Total sales burst through the billion-dollar mark.
By 1998, Magna had become one of the world's largest auto parts suppliers, with annual sales of $6-billion. Magna got its own assembly capability through the acquisition of Steyr-Daimler-Puch. Magna's successful Austrian unit held contracts to assemble Jeep Grand Cherokees, Chrysler Voyager minivans and BMV SUVs.
Mr. Stronach's attempt to vault Magna International into the big leagues of auto manufacturing failed in 2007, with New York Investment firm Cerberus Capital Management LP winning the bidding battle for the troubled Chrysler Group. After Chrysler filed for bankruptcy protection two years later, Mr. Stronach said, "We were so lucky we didn't get it."
A horse racing enthusiast, Mr. Stronach wanted to revive the declining industry by turning racetracks into destinations. But in early 2009, his vision ground to a halt when his debt-hobbled race track and gambling company, Magna Entertainment Corp., filed for bankruptcy protection.
Also in 2009, Magna lost a deal with GM to invest in its German unit Opel, killing Mr. Stronach's vision of turning his company into a full-fledged vehicle manufacturer.
"You take it as it comes and you go on and look for other opportunities," he said in November.
Jill Mahoney