It's easy to fall back on national stereotypes when assessing the characters involved in the Canadian/Russian alliance now taking on GM Europe. If Oleg Deripaska the oligarch caught up in the Mandelson/Osborne yacht imbroglio last summer is the risky player; then Canadian car-parts magnate Frank Stronach must be the safe, dull one.
Well, think again, says The New York Times. As any Magna International shareholder will tell you, Stronach, a colourful tycoon not averse to being addressed as 'king' in meetings, is a law unto himself. "He's a sort of genius and a bit of a buffoon wrapped together."
Vauxhall's new owner left his native Austria for the New World half a century ago with just $200 in his pocket, and built up North America's largest car-parts firm from a single garage in Toronto.
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His personal fortune is reckoned at $1bn. Yet it has been a "tumultuous career", says the Canadian Globe & Mail.
Stronach's imperial, and often mercurial, management style has both enriched and enraged shareholders. He's been sued "for impolitic treatment of subordinates, particularly female ones"; taken to court for firing staff, and had "controversial" relationships with politicians, including far right Austrian demagogue Jrg Haider. He pays himself like a king and has an ego the size of a big end.
Stronach is also no stranger to bankruptcy. In March, his giant gambling and race-course operation Magna Entertainment went to the wall, notes The Observer. It was just the latest in a series of grandiose ventures from theme parks in Austria, to plans for an international airline that have drained the resources of the car-parts operation over the years (see below). In 1991, the whole group came within a whisker of going bust, with debts of $1bn.
But in the auto industry, Stronach has always been a player, says The New York Times. He got his first break in 1950 when he won a contract to build visors for GM. But despite a stream of lucrative deals supplying parts to the industry worldwide, he's always dreamed of owning his own marque: in 2007, he tried and failed to win Chrysler. That year also saw the genesis of Stronach's biggest punt to date, says the Canadian National Post.
Having met Oleg Deripaska (then owner of Russia's Gaz marque), they hatched a plan to conquer the car market in Russia and beyond. The resulting deal was backed by the then Russian president Vladimir Putin. But the new joint venture, which involved Deripaska taking a stake in Magna, was "worrisome" for those who didn't share Stronach's view of Russia as "the next great frontier".
When Deripaska's financial troubles forced him to sell his stake in Magna, it looked like all bets were off. But thanks to help from Russia's state-owned savings bank, Sherbank, and the convenient collapse of GM, the plan is back in motion. It marks a big "gear change" for Stronach, 76, and could be seen as "the crowning point of his career", says The Times. But many Canadians still share the National Post's 2007 view that Stronach's dealings with Russia "will either be a home run, or go down as one of the most naive business transactions ever".
Frank's rules for success
Frank Stronach may well welcome the GM deal as a chance to put himself back in the limelight, says The Times. In Canada, his success "has almost been eclipsed by his daughter's fame". Belinda Stronach now back at Magna as executive vice-chairman stormed onto the scene as the political ingnue who ditched both the Conservative party and its deputy leader (her lover) to take up with the Liberals instead. She has also been linked in the tabloid press to Bill Clinton.
Stronach must also be hoping that the GM deal draws a veil over his most recent business debacle, says The Daily Telegraph: namely, his doomed attempt to combine horse racing courses with gambling and leisure centres in the US and Europe. When he opened the $100m Magna Racino outside Vienna five years ago, the packed grandstands cheered his declaration that "everyone shall be a winner", says the Canadian Globe & Mail.
The empty course "is now a monument" to his folly and extravagance. The same is true of many other failed ventures: from the marketing of an energy drink named "Frank's", to Stronach's plans to abolish the Canadian parliamentary system in favour of computer-selected citizen juries.
How does he get away with it? It's all down to "Frank's Rules", says the Canadian Globe & Mail: Frank goes for what he wants; despite only holding 4% of Magna shares, he keeps voting control; he does not care for the opinions of shareholders when they oppose what he wants. As he says, if they don't like his style or paychecks, "they can just sell their shares".
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