TORONTO/PARIS (Reuters) - Magna International Chairman Frank Stronach, a struggling toolmaker when he left Europe more than 50 years ago, has returned in triumph after winning a battle for control of Germany’s Opel.
The 77-year-old Magna founder -- a rags-to-riches tycoon with a passion for fast horses, hard work and soccer -- emigrated from Austria to Canada at the age of 21 with a suitcase and $200 in his pocket.
Now the auto parts company he built from scratch has beaten out Belgium’s RHJ International and other suitors for control of the European unit of General Motors.
The son of a Communist labor activist and a factory worker, Stronach left school when he was 14 to become a tool and die apprentice at a factory in Weiz, a town in the southeastern foothills of the Austrian Alps where he was born.
His personal fortune is now estimated at over $1 billion, but when he arrived in Canada, Stronach’s first job was peeling potatoes and washing dishes in a hospital kitchen.
“I experienced what it was like to be hungry, to be discriminated against and to be treated unfairly,” Stronach has said. He now prides himself on treating his workforce well. Employees receive a share in company profits, and individual plants are run as independent entities.
After a string of rejections, Stronach got his break with the small tool and die company he went on to manage.
More than half a century later, the company controls the long-established German Opel brand, along with its British sister brand Vauxhall. General Motors was forced to unload the operations as a result of the unprecedented crisis that crippled the automotive industry.
Magna was pitted against RHJ, along with China’s BAIC and Italy’s Fiat, both of which dropped out of the race earlier in the process.
Stronach is not content with just tackling Western Europe in his gamble on the future of the auto industry. He hopes to grab an initial 20 percent slice of the Russian market. It is expected to overtake Germany as Europe’s biggest market soon.
In winning the Opel bid, the company that started out in a Toronto garage over 50 years ago now competes against the likes of Fiat, BMW and Volkswagen AG, all of which Magna counts as customers.
Magna is the world’s third-largest automotive parts supplier by revenue and has about 75,000 employees -- not including Opel’s 50,000.
Its chateau-style headquarters is nestled amid rolling farmland about 50 km (30 miles) north of Toronto. The sprawling estate includes Stronach’s mansion, homes for other members of his family, an 18-hole golf course and thoroughbred stables.
Magna partnered with Russia’s largest lender, Sberbank, on the bid, which includes a 500 million euro investment in Opel.
Under the arrangement, Magna and Sberbank each own 27.5 percent of the company. Opel’s employees hold 10 percent and GM the remaining 35 percent. Russian carmaker GAZ Group is an industrial partner with the option to buy Sberbank’s stake.
Stronach, who says he would like to spend more time skiing and playing tennis when he retires, is married with two children.
His daughter Belinda is a former politician, and Stronach himself once made an unsuccessful run for Parliament. Belinda, currently Magna’s executive vice-chairman and a former Magna CEO, is seen as her father’s successor. His son Andrew is involved in another of his father’s passions, thoroughbred horse-racing.
Stronach senior set up the Magna Entertainment Corp, now under bankruptcy protection, which owns and operates some of the most fabled racetracks in the United States, as well as in Austria.
Magna also has its European headquarters in Austria, where Stronach is the president of soccer team FC Magna in Austria’s second division. He is the former owner of FC Austria Vienna.
Reporting by John McCrank and Helen Massy-Beresford; editing by Rob Wilson