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DE RUEHVI #3588/01 3551057
ZNR UUUUU ZZH
R 211057Z DEC 06
FM AMEMBASSY VIENNA
TO RUEHC/SECSTATE WASHDC 5822
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 VIENNA 003588 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EIND EINV ETRD ETTC AU
SUBJECT: AUSTRIA'S STEYR COMPANIES: WHO OWNS WHAT AND WHO DOES WHAT 
 
Summary 
------- 
 
¶1.  There are several independent Austrian companies with the name 
"Steyr."  All of them originally formed one company, 
Steyr-Daimler-Puch (SDP).  However, in the 1980s, SDP, one of 
Austria's largest industrial conglomerates, encountered major 
financial problems that resulted in the company's break-up into 
various Austrian and foreign controlled entities.  The "Steyr 
companies" are now independent firms producing a wide range of 
industrial goods.  The most notable SDP successors are Steyr 
Mannlicher (SM), which sells hunting and military rifles; Steyr 
Spezialfahrzeuge (SSF), which produces busses, tanks, and armored 
vehicles; and Magna Steyr Fahrzeugtechnik (MSF), which assembles 
automobiles for BMW, Chrysler, Mercedes, and Saab.  SM and SSF have 
occasionally been the subject of negative press criticism for 
controversial arms sales to the Middle East and military sales to 
African states.  End Summary. 
 
 
The Origins of Steyr: Steyr-Daimler-Puch (SDP) 
--------------------------------------------- - 
 
¶2.  Steyr's origin dates back to 1864, when the company began 
manufacturing rifles in Steyr, Austria.  In the 1920s, the firm 
merged with Austro-Daimler-Puch, a bicycle and car manufacturer, to 
form Steyr-Daimler-Puch (SDP).  SDP developed into a formidable 
international company, producing rifles, ball bearings, bicycles, 
motorcycles, cars, busses, trucks, tractors, agricultural machinery, 
tanks and military vehicles.  Following World War II, SDP added 
tanks, armored vehicles (Saurer, Kuerassier, Pandur, ASCOD-Ulan) and 
utility vehicles (Haflinger, Pinzgauer) to its product line.  In 
1980, SDP was Austria's third largest industrial conglomerate with 
over 17,000 employees.  A major financial crisis in the late 1980s 
led to reorganizations, outsourcing of productions to new companies, 
sales of some productions and closings of others. 
 
 
Steyr Mannlicher (SM) 
--------------------- 
 
¶3.  In 1987, SDP established Steyr Mannlicher (SM) as a 100% 
subsidiary concentrating on rifle production.  Following  a series 
of ownership changes in the 1990s, Austrian Cura Investholding, 
under the direction of Wolfgang Fuehrlinger, obtained SM.  In April 
2004, SM entered a joint venture with Malaysia's National Aerospace 
and Defense Industries to produce SM's AUG A3 military assault 
rifles for the Malaysian Army.  SM consists of three companies: 
Steyr Mannlicher Austria; Steyr Arms Inc. in Cumming, Georgia; and 
Steyr Mannlicher SDN in Kuala Lumpur.  All three operate as 
independent companies, with Fuehrlinger as CEO.  SM has world-wide 
exports, with primary markets in Western Europe, Australia, the 
U.S., Malaysia and Saudi Arabia.  In 2005, SM Austria had 100 
employees and total sales of Euro 11.3 million. 
 
¶4.  SM has frequently appeared in the Austrian press under negative 
headlines.  In April 2003, Austrian press reported that U.S. 
soldiers found SM rifles in the arms arsenal of Saddam Hussein's son 
Udai in Bagdhad.  Following the delivery of approximately 800 
long-range, high precision sniper rifles (model Steyr HS.50 with a 
range of 1,500 meters and a  12.7 x 99 millimeter caliber) to Iran 
in 2004, the USG imposed nonproliferation sanctions against SM in 
December 2005. 
 
 
Steyr Spezialfahrzeuge (SSF) 
---------------------------- 
 
¶5.  In 1987, SDP outsourced production of busses, tanks and armored 
vehicles to its Steyr Spezialfahrzeuge (SSF) subsidiary.  In 1999, a 
consortium including SSF CEO Hans Michael Malzacher and General 
Dynamics (25% share) purchased SSF from Canada's Magna 
International, which had held a 66% share in SSF since 1998. 
General Dynamics assumed a 100% stake in SSF in 2003.  In 2005, SSF 
had 350 employees and annual sales of Euro 170 million.  Since 2005, 
SSF has signed several major export contracts, including orders from 
the Portugese Army (Euro 365 million) and the Czech Defense Ministry 
(Euro 821 million for 200 Pandur armored vehicles 
 
¶6.  SSF has also been the target of negative media coverage 
regarding certain sales of military equipment.  In 2001, SSF 
delivered military vehicles to an elite unit of Zimbabwean President 
Robert Mugabe, as well as tanks to Botswana, which allegedly 
financed the deal with funds earmarked for development assistance. 
In 2002, SSF purchased the insolvent Steyr Nigeria, originally an 
SDP agricultural equipment subsidiary, from the Nigerian 
Government. 
 
 
Magna Steyr Fahrzeugtechnik (MSF) 
--------------------------------- 
 
 
VIENNA 00003588  002 OF 002 
 
 
¶7.  Since the sale of its bicycle and motorcycle production to 
Italy's Piaggio in 1987, Steyr Fahrzeugtechnik (SFT) has 
concentrated on the development and production of all-terrain 
vehicles for civil and military uses.  In 1990, SFT and Chrysler 
started "Eurostar," a 50/50 joint venture to assemble Chrysler 
Voyager minivans and Jeep Cherokees in Austria  In 1998, Canadian 
car components manufacturer Magna International obtained a majority 
share in SFT through its Austrian subsidiary, Magna Steyr.  Chrysler 
subsequently exercised an option in 1999 to buy out Magna's shares 
in Eurostar to obtain 100% ownership.  In 2002, Chrysler sold its 
100% share in Eurostar, which assembles for BMW, Chrysler, Mercedes 
and Saab, back to Magna Steyr.  Magna Steyr then reorganized SFT and 
Eurostar under the name, Magna Steyr Fahrzeugtechnik (MSF).  MSF is 
the largest automobile company in Austria, with total sales of Euro 
3.9 billion in 2005 and 7,500 employees. 
 
 
ZF Steyr 
-------- 
 
¶8.  In 1999, the German ZF Group, a supplier of automotive axles and 
off-road technology, took over Steyr Antriebstechnik, a producer of 
agricultural gears.  The company produces in Austria under the name 
ZF Steyr with 360 employees and annual sales of Euro 110 million. 
 
MCCAW