VZCZCXYZ0011
RR RUEHWEB

DE RUEHVI #1069/01 2331413
ZNR UUUUU ZZH
R 211413Z AUG 09
FM AMEMBASSY VIENNA
TO RUEHC/SECSTATE WASHDC 3197
INFO RUCPDOC/USDOC WASHDC
RUEHRL/AMEMBASSY BERLIN 1802
RUEHOT/AMEMBASSY OTTAWA 0511

UNCLAS VIENNA 001069 
 
SIPDIS, SENSITIVE 
 
E.O. 12958: N/A 
TAGS: EIND EINV ECON PINR AU
SUBJECT: Magna's Frank Stronach - Enigmatic Austrian Emigre and 
Industrial Power Broker 
 
Sensitive but unclassified -- protect accordingly. 
 
¶1. (SBU) SUMMARY:  This cable offers biographical context on Frank 
Stronach, the 76 year-old "Austro-Canadian" founder and CEO of Magna 
International, one of the world's largest automotive companies and a 
leading contender to acquire General Motors' European operations. 
After emigrating to Canada in the 1950s and a meteoric rise there, 
Stronach partially relocated his personal and business interests 
back to Austria in the 1980s.  A visible media presence here, 
Stronach has close ties to politicians in Austria and elsewhere in 
Europe which helped Magna win over German decision-makers and 
Russian financers in the Opel deal.  Austrians respect Stronach as a 
self-made billionaire, but his public engagements have met with 
mixed success.  END SUMMARY. 
 
¶2. (U) Frank Stronach was born in 1932 as Franz Strohsack ("straw 
sack") into a working-class family in a village in the southern 
Austrian state of Styria.  At 14, he left school to apprentice as a 
tool/die maker.  The ambitious young man worked as machinist in 
Austria and in Switzerland (where he glimpsed the good life outside 
his war-devastated home country) -- but quickly found his ambitions 
blocked.  According to biographer Wayne Lilley, Stronach decided 
spontaneously in 1953 to apply for visas in the four most popular 
countries for post-war emigrants:  the United States, Canada, 
Australia and South Africa.  The Canadians were simply the first to 
grant him a visa, so he emigrated to Quebec, moving later to 
Ontario. 
 
¶3. (U) Stronach's stellar rise in Canada is well documented.  He ran 
his first business in 1956; in 1969, he founded Magna International 
through a merger.  Magna International evolved into one of the 
world's largest automotive suppliers, engaged in designing, 
developing and manufacturing technologically advanced systems, 
assemblies, modules and components; the company now engineers and 
assembles complete cars and light trucks on behalf of original 
equipment manufacturers ("OEMs").  Magna has 74,000 employees in 25 
countries, with pre-crisis sales of $20 billion per year. 
 
Engagement in Canada (NOTE: Embassy Ottawa background) 
- - - - - - - - - - - - - - - - - - - - - - - - - - - 
 
¶4. (SBU) Frank Stronach is known in Canada as a highly eccentric but 
also very successful businessmen.  With the exception of his 
entertainment group (race tracks, etc.), his Magna International 
auto parts enterprises are a Canadian success story.  Once a small 
parts supplier for the Big Three and Japanese auto assembly plants 
located in southern Ontario, Stronach transformed his operations 
into a highly innovative, state-of-the-art automotive production 
company capable of producing a single part or an entire vehicle on a 
bespoke basis for clients around the world.  With production 
facilities in China and financial partners in Russia ('Sberbank'), 
Magna defies the image of conservative Canadian business operations. 
 However, Stronach's high-flying business activities are balanced by 
a deep commitment to civic affairs -- from major endowments to 
regional health care facilities near his Aurora, Ontario plant to 
annual sponsorship of the national "If I Were Prime Minister" 
contest designed to encourage Canadian university students to enter 
political life. 
 
¶5. (SBU) Perhaps Stronach's most important contribution to Canadian 
politics was the brief but eventful entry of his daughter, Belinda 
Stronach, into federal politics.  A successful businesswoman in her 
own right, Ms. Stronach entered federal political politics at the 
top - challenging Stephen Harper in a leadership bid for the 
Conservative Party in 2004.  While unsuccessful in her bid for party 
leadership, she was elected as a Conservative MP and served as 
Conservative Trade Critic, all the while helping to foster a more 
progressive image for the right of center party.  However, her left 
of center views on social issues put her at odds with the party and 
in 2005, she crossed the floor of the House of Commons, to join the 
Cabinet of Liberal Prime Minister Paul Martin.  The move rocked 
Canadian federal politics and derailed the opposition's plans to 
topple the Liberal government.  In 2007, Ms. Stronach left politics 
in order to work on Magna's (unsuccessful) bid to acquire Chrysler 
Canada. 
 
A Parallel Rise in Europe 
- - - - - - - - - - - - - 
 
¶6. (SBU) Three decades after emigrating to Canada, Stronach 
resettled (part-time) in Austria in 1986, opening another successful 
chapter in his rags-to-riches story and becoming an atypical 
celebrity.  Stronach founded "Magna Europa" in the village of 
Oberwaltersdorf in Lower Austria in the late 1980s and in 1998 
bought troubled automotive supplier Steyr-Daimler-Puch (which he 
merged with his company to become "Magna Steyr").  In 2002, Magna 
Steyr took over Chrysler's Eurostar production facility in Graz. 
Those deals and other acquisitions have made Magna one of Europe's 
leading automotive players, in a league with the major OEM's.  NOTE: 
Magna's European head and leader of the Opel takeover bid, co-CEO 
 
Siegfried Wolf, comes from similarly humble origins (an Austrian 
farming family) and may reflect Stronach's affinity for "self-made" 
individuals over the established elite - END NOTE. 
 
¶7. (SBU) Stronach's success in Europe stems in part from long-term 
political networking.  In Austria, his close ties to leading 
politicians have undoubtedly helped Magna secure favorable 
treatment.  Stronach recruited former Chancellor Franz Vranitzky for 
the Supervisory Board of Magna International immediately after 
Vranitzky resigned as head of government in 1997 (and Vranitzky 
reportedly encouraged Stronach to become active in Russia over the 
past decade).  Political entree helped Magna build ties to Russian 
tycoon Oleg Deripaska (who was invested in Magna in 2007-2008 before 
running out of money) and to Russian bank Sberbank, partial 
financier of the proposed Opel takeover.  Vranitzky's strong 
relations with German Social Democrats (particularly Walter 
Steinmeier) may also have helped Magna in the Opel negotiations. 
Stronach has bankrolled politicians of all colors, including 
prominent conservative Karl-Heinz Grasser before the latter became 
finance minister in 2000. 
 
¶8. (U) Stronach is well-known in Austria (and equally controversial) 
in sports and entertainment.  From 1998 to 2006, he owned the 
popular soccer club FK Austria Wien, before selling the team in 
favor of a smaller club (Wiener Neustadt).  From 2000 to 2005, he 
even served as president of the Austrian "Soccer Bundesliga" (the 
Austrian version of U.S. Major League Soccer).  His soccer 
leadership was characterized by repeated controversy: a revolving 
door in terms of personnel, public appearances which were viewed as 
oddball, and only modest professional success.  Likewise, Stronach's 
investment in horse racing -- his "second love" after soccer -- has 
been a losing proposition.  In 2004, he opened a huge leisure center 
and horse racing site in Ebreichsdorf (Lower Austria), but the 
project has foundered due to lack of interest and may have to close 
soon.  Other large Stronach ventures in Austria, such as an 
amusement park (1997) and recently a proposed new soccer stadium, 
have failed to leave the starting gate due to environmental 
resistance and lack of public financing. 
 
COMMENT 
- - - - 
 
¶9. (SBU) Stronach's extroverted but eccentric personality makes him 
a somewhat polarizing figure in Austria, despite widespread 
admiration for his rise from rural apprentice to automotive tycoon. 
Unions periodically criticize him for his alleged poor commitment to 
employee rights; soccer fans complain about his interventionist 
management style (but seek his sponsorship);  and the media 
sometimes ridicule him for less-than-polished public appearances. 
An informed observer (biographer Norbert Mappes-Niedick) claims 
Stronach's frenetic activities in Austria represent a quest for 
recognition in reaction to unhappy post-war childhood years. 
Although his public persona often falls short of media expectations 
(even in his native country), Stronach remains a capable political 
player behind closed doors -- no doubt a factor in his success 
convincing European policy-makers to support the Magna bid to 
acquire General Motors' extensive operations in Europe, including 
the Opel brand.  END COMMENT. 
 
¶10. (U) This cable was coordinated with Embassy Ottawa. 
 
EACHO