78-year-old chairman and founder steps down but will pursue electric car and horse racing ventures

Frank Stronach won't stop......building factories......factories mean jobs.

He wonders why financial services industry  managers "get paid more for reducing jobs".

The 78-year-old iconic Canadian entrepreneur stepped down as chairman of auto parts giant Magna International on Wednesday after almost four decades of creating thousands of jobs.

But the restless, fit-looking billionaire told shareholders at their annual meeting that he won't really be slowing down and sitting back on a recent pile of cash from Magna

He will be using his time and money to produce even more jobs.

Stronach, who received a standing ovation after a final 25-minute, free-wheeling speech, said he is focusing hard on an electric car venture under his control in partnership with Magna

"I can see a very substantial business down the road," he'said. " .. .I try to build factories. Factories mean jobs."

Stronach built Magna from a one¬man t60l-and-die shop in west-end Toronto during the late 1950s into one of the biggest auto parts makers in the world.

Magna now employs more than 100,000 workers in 263 factories and 84 research centres in 26 countries. It has about 17,500 employees at 44 plants and 11 research opera¬tions in Canada

A Stronach family trust collected about $863 million in cash and stock last year after selling off the company's control block in a controversial transaction. As part of that exchange, Stronach also received a controlling stake in Magna E-Car Systems, plus multi-million¬dollar consulting contracts during the next few years.

Stronach has been mulling family succession and control of Magna in recent years in view of the declining possibility that his daughter Belinda or son Andrew might take over.

"I have not regrets," he said. "One of these days, I won't be around ... Could I manage Magna from the grave? I came to the conclusion, that's pretty difficult to do so I accepted that proposal (to sell the control block)."

Among the positive points of the deal, Stronach said he will no longer have to deal with restrictions of a public company at Magna that can shackle management and blunt en¬trepreneurship.

"I have a thousand ideas, no strings attached,' said Stronach, who will remain a director, hon¬orarychairman and one of the com¬pany's biggest minority shareholders.

Regarding employment, Stronach said managers should get paid for how many jobs they create.

"For the financial industry, they get paid more for reducing jobs," he said. "It's funny ... I don't think society can go that way."

While Stronach has experienced phenomenal success in building an auto parts empire, numerous other ventures have fizzled. They ranged from a theme park and soccer league in his native Austria to a magazine and energy drink here.

Stronach also suggested earlier he will pump more money into attempts to revitalize the struggling thoroughbred horse racing industry in the U.S. He currently owns several key race tracks including Santa Anita Park in California and Gulfstream Park in Florida.

Tony Van Alphen
Business Reporter
Toronto Star,

1 comment:

Dan Zwicker said...

The life insurance industry's 'captive agency' distribution channel became unprofitable in the early 90's. This triggered a move to the MGA channel. The insurance companies embraced this transition. It allowed them to shift the operating management of life insurance agents to another channel. Why?