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Frank Stronach

2012 Aurora

In late August 2005, we all watched in horror as Hurricane Katrina swept through the Gulf Coast of the United States. New Orleans was pummelled with 125-miles-per-hour winds. Inadequate flood walls holding back the Mississippi River broke. Torrential waters overflowed levees and submerged 80 percent of the city. 1,836 people in New Orleans alone were killed. People were stranded on the tops of houses and buildings. Messages for help, and messages to loved ones, were painted on rooftops as people waited to be rescued. Even the hastily organized shelters outside of New Orleans did not have enough clean water and food. People were lucky to get away with a backpack or garbage bag of personal belongings. Many lost everything they owned.

As we watched the devastating images play out in the media, most of us felt helpless. Some of us donated money. Some of us did more.

One of those people was Frank Stronach, founder of Magna International.[i] Watching televised reports of “one of the worst national disasters”[ii] in U.S. history from a hotel room, Frank Stronach mobilized the evacuation of hundreds of displaced New Orleans residents. He organized a team that helped rescue people from some of the poorest areas of the city. They were transported by air and bus to a thoroughbred horse training facility in West Palm Beach Florida. A team of more than 100 doctors, nurses, chefs and other volunteers provided medical attention, the necessities of life and a safe haven for Katrina victims. Within days Frank identified an 800-acre parcel of land in Simmesport, Louisiana as the base for a new community, Magnaville.[iii] There, the victims of Hurricane Katrina were provided with housing and an opportunity to work in various agricultural ventures. In the words of Frank Stronach, they were given the resources for “a fresh start and a new life.” One of the New Orleans evacuees said, “We were picked up by an angel. The man is giving us this out of the goodness of his heart.”[iv]

One of the key principles of the unique Corporate Constitution Frank Stronach created at Magna International is social responsibility. Magna allocates up to two percent of its profits, before tax, for “charitable, cultural, education and political purposes to support the basic fabric of society.”[v] As Frank has said, “Two percent may sound like a miniscule number, but when profits approach the $1 billion mark, two percent is $20 million.” Magna’s Corporate Constitution, and its formula for sharing profits among key stakeholders, including society, has governed this international automotive parts supplier for almost 40 years.

When viewing Magna International’s meteoric rise from a small tool and die company to “one of the world’s largest and most diversified suppliers of automotive components, systems and modules”[vi], it is hard to separate the man from the company he founded.

Born in 1932 in Weiz, a small town in the southeastern foothills of the Austrian Alps, Frank Stronach was no stranger to hunger and hardship. He grew up in a neighbourhood that had been severely impacted by both the Great Depression and the Second World War. As the child of a labour rights activist and a factory worker, he learned the importance of fairness, concern for people, hard work and economic independence.[vii] At 14 years old, Frank left school to become a tool and die apprentice. In 1954 he brought his skills, and the principles that he learned at home, to Canada. He arrived here with only a suitcase and $200. Just three years later, in 1957, he opened a one-man tool and die shop.[viii]

During the first year of operation, Frank slept on a cot next to the machines inside his shop. Utilizing the principle of hard work that he learned at home, he built a company that surpassed even his expectations. “When you start out, nobody thinks in those terms (becoming a large, multinational corporation). At that time I just wanted to accumulate enough money so that I would never be hungry again. As you accumulate experiences, know-how, your horizon gets wider and wider.” In 1959 Frank’s small company landed its first auto parts contract with General Motors to produce metal-stamped sun visor brackets. By 1961 the small tool and die company was rapidly expanding. When plant foreman, Hermann Koob, wanted to leave to start his own business, Frank’s solution to retaining his skilled employee was to open a second operation and make Hermann a partner. He put Hermann in charge of the new factory and took the first step in developing “Magna’s success formula” of making managers and employees partners in profits and ownership.

Magna, under the leadership of Frank Stronach, has grown to include operating divisions in 26 countries throughout the world. The evolution of Frank’s philosophy on fairness and concern for people was formalized in an Employee Charter of Rights. Established in 1988, the Magna Employee's Charter outlines employee rights dealing with job security, fair treatment, employee equity, profit sharing and the confidential employee “Hotline.” This document, posted at all Magna divisions, acts as a “blueprint for fairness in the workplace.”[ix]

Frank’s ideals of caring for people can also be found in the numerous acts of giving and the charitable causes he initiated at Magna International. Always active in children’s charities, two of the many organizations that Frank has supported over the years are Easter Seals and Big Brothers Big Sisters, where Frank served as a volunteer Big Brother. Sending help to devastated parts of the world is not limited to Hurricane Katrina. In 2002 Magna provided disaster relief to Germany and the Czech Republic when flooding destroyed homes, leaving 2000 people homeless. Magna was also on hand to provide assistance to the northwestern region of Pakistan that was devastated by an earthquake in October 2005. As residents of York Region, we are all aware of The Hoedown, Canada’s “largest country-themed” charitable fundraiser. This event, begun in Frank Stronach’s backyard in 1987, has raised millions of dollars for local charities. It has flourished to become the largest annual charitable fundraiser in York Region. It’s also a great reason for us to dust off our cowboy hats and boots for a good time and a commendable cause.[x]

It is said that deeds speak. Frank Stronach was bestowed the B’nai Brith Award for Merit for Humanitarian Services[xi] in 2005 for his contributions in the Hurricane Katrina disaster. US Consul General, Jessica LeCroy said, “It is Frank Stronach’s special spirit of optimism and faith in the goodness of life which evoked such a powerful and immediate response to help my people displaced by Hurricane Katrina find a home.”

Frank Stronach saw devastated people in dire need. He was called to action by his sense of social responsibility and his concern for people. The young man who came to Canada on 1954, seeking to establish economic independence for himself and his family, has generated prodigious resources that he now shares with his fellow human beings in the true spirit of philanthropy.

Of his many charitable and visionary initiatives, Frank said it best himself. “With all of the resources at my disposal, I simply can’t, in all good conscience, sit passively by when I have a chance to make things better. I look at my grandson and my granddaughters and all of our future generations and I think, what kind of world do I want to leave behind? I’ve got to try to make a contribution to change the system for the better.”

Awards and Honorary Doctorates

Mr. Stronach has served on numerous corporate, government and university boards and has provided assistance to a wide range of charitable and community service organizations. He is the recipient of a Doctor of Philosophy, Honoris Causa from University of Haifa in Haifa, Israel; a Doctor of Laws, Honoris Causa LL.D. from Cape Breton University in Sydney, Nova Scotia; a Doctor of Commerce, Honoris Causa from St. Mary's University in Halifax, Nova Scotia; a Doctor of Business Administration, Honoris Causa from Laurentian University in Sudbury, Ontario; and an Honorary Professorship from the Graz University of Technology in Graz, Austria. In 1996, Mr. Stronach was inducted into the Canadian Business Hall of Fame. He won the 1997 "Business Leader of the Year Award" from the Richard Ivey School of Business and the 1998 "Entrepreneur of the Year Award" from the University of Michigan. In 1999 he was named a recipient of the Order of Canada and in 2000 he won the Ernst & Young "Entrepreneur of the Year Lifetime Achievement Award." In 2002, the Canadian Council for International Business named Mr. Stronach the 2001 “Canadian International Executive of the Year”, and in that same year he received the Gold Medal for meritorious service from the Republic of Austria. In 2004 he received the Yves Landry Foundation “Person of the Year” Award for his achievement in promoting technological education and technical skills training. In 2005 he received the B’nai Brith Canada Award of Merit for distinguished humanitarian service. He was inducted into the Canadian Manufacturing Hall of Fame in 2006, and in 2010 he received the Joseph Schumpeter Award for innovative achievements in economics, politics or business, and the Grand Decoration of Honor in Gold with Star, one of the highest civilian honours given by the Republic of Austria. In 2011, he was presented with the T. Patrick Boyle Founder’s Award, the highest honour bestowed by The Fraser Institute in recognition of excellence and accomplishment in the promotion of entrepreneurship, philanthropy and free-market ideas.


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