Frank Stronach — The man behind auto parts maker Magna

“Frank is a smart man,” said Lilley. “He may have a big ego, but he grew his auto parts company by being very astute and, in some ways, cheap. He doesn't believe in unions and believes that every employee should own a part of the company. That business acumen has taken him very far.”

Stronach has also ranged into worlds far from the auto parts industry: horse racing and real estate. Magna Entertainment Corp. (MEC) was spun off from Magna International in 2000 to become what the company has described as North America's No. 1 owner and operator of horse racetracks. MEC operates or manages seven thoroughbred racetracks: Santa Anita Park, Gulfstream Park, Pimlico Race Course, Laurel Park, Golden Gate Fields, Thistledown and Portland Meadows.

However, Magna Entertainment Corp. filed for bankruptcy in March as ticket sales and wagers fell in the recession.

Stronach also is one of the top owners and breeders in thoroughbred racing, winning Eclipse Awards as breeder of the year. Among his top horses were 2004 Horse of the Year Ghostzapper, 2000 Preakness winner Red Bullet, 2000 2-year-old male champion Macho Uno and 1998 Breeders' Cup Classic winner Awesome Again.

In both Magna International and Magna Entertainment, Stronach has almost total control of the public companies because of his blocks of super-voting shares.

A review of their filings with the U.S. Securities and Exchange Commission also shows that he has aggressively transferred assets among his various companies to keep his bet on the future of horse racing alive.

Stronach referred to himself as a “king” at one shareholder meeting and was compared to Cuba's Fidel Castro at another during a shareholder revolt, said Lilley.

Last year, Stronach made his first attempts to enter into the auto manufacturing sector by putting forth a bid to buy Chrysler before Cerberus Capital Management LP trumped him with a 5.5-billion euro (C$8.2-billion) offer in May of that year.

Stronach also announced last year that he was sharing control of Magna International Inc. with Oleg Deripaska, the Russian oligarch, who invested US$1.54 billion in Magna to help expand his carmaking business, OAO GAZ, in Russia.

The deal fell through when Deripaska announced that he was forced to cede his 18 percent stake in the auto parts company to bankers who helped fund the initial investment.

Stronach remained determined to get into the Russian auto market.

“He puts in US$300,000 million and he becomes a partner in Opel, with GM, the U.S. government and autoworkers.

That's not a bad deal. Magna's forte is bringing companies back from bankruptcy and selling new ideas, so hopefully Frank will be able to turn this company around too and sell it as a new and improved GM to the rest of the world,” said Lilley.

A Canadian auto industry analyst said the Opel deal gives Magna a strong opportunity to expand into Russia, a market where foreign car sales surged in 2007 and 2008 before oil prices fell and the Russian economy slowed down.

“The potential in Russia is definitely there for Magna,” said Carlos Gomes, an economist and auto industry specialist with Scotiabank.

“If you look at sales through the first half of 2008 before you had the collapse in oil prices and the global recession, sales in Russia were actually increasing at such a pace that it was likely to surpass Germany as the largest market in Europe.”

“When oil prices collapsed sales just tanked. But the reality is that the potential is there going forward,” said Gomes.

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