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Retreating Stronach rules out negative impacts on Styria

Magna founder Frank Stronach has claimed his decision to withdraw from day to day decision-making will not have unpleasant effects on his home province�s "car cluster".

The 77-year-old businessman recently decided to accept a multi-million payout for losing his voting rights at the Austrian-Canadian car parts maker.

Stronach reportedly received around 800 million Euros after accepting his voting rights among company shareholders are reduced from 66 per cent to just 7.4 per cent.

The province of Styria � left behind by Stronach when he emigrated to Canada to become one of America�s most successful entrepreneurs in 1954 � has massively benefited from the canny businessman�s activities.

Stronach took over struggling Austrian car manufacturer Steyr Daimler Puch in 1998 and set up the Magna Steyr factory just outside the city of Graz where more than 40,000 vehicles were built for BMW, Peugeot, Aston Martin and other firms in the first half of this year.

The province�s "car cluster" features around 180 companies with 44,000 employees.

Stronach stressed today (Weds) concerns that Styria�s economic strength will suffer due to his retreat from Magna operations were out of place.

He announced: "I�m not leaving Magna. I�m still head of the supervisory board and the biggest individual shareholder. There will be no change about this, and many Styrians will continue to have important positions at Magna."

The highest-ranking Styrian decision-maker at the firm is co-chief Siegfried Wolf. With 3.8 million Euros a year, Wolf is Austria�s best-paid manager.

Fears jobs may be axed following the dramatic reduction of Stronach�s voting rights however linger on.

Stronach stressed once more today he will now fully focus on the creation and construction of E-Cars.

The multi-millionaire revealed in an interview last June that he planned to pour 65 million Euros into the development of electric cars as a first-off investment, with Magna contributing around 180 million Euros.

"E-Cars are a big issue, and I want to be in charge," he told Austrian magazine News.

Stronach said he was optimistic electric cars make around 10 per cent of all vehicles in 10 years. "You don�t have to be a scientist to realise that we�ll run out of oil sooner rather than later. I see a great future ahead for the electric car," he said.

Stronach, who heads and finances Austrian football Bundesliga club Magna Wiener Neustadt, further said he could imagine one in two cars being E-Cars in 20 years.

It is however not clear yet where his E-Cars will be manufactured. Asked whether Austria was among them, the Magna founder remained tight-lipped. "I�ll approach the Austrian government soon to inform it of our plans," he said in June, adding that he had already received invitations from "several countries" interested in becoming the location of his choice.

Stronach did not make clear today whether these talks have taken place in the meantime.

Asked for his points of view regarding the political circumstances in his home province less than three weeks before Styrians head to the polls on 26 September, he said: "I�ve always expressed my opinion that there are too many politicians and too few people with an economic background in politics."

Stronach added referring to the incumbent Social Democratic (SP�) governor: "I like Franz Voves for his business past."

Voves became the first Social Democratic governor of the province since World War Two when his party sensationally overtook the People�s Party (�VP) for first place in the 2005 ballot.

Stronach was awarded the Great Honorary Decoration for Services to the Republic of Austria with a Gold Star by �VP Economic Minister Reinhold Mitterlehner in Graz today.

Mitterlehner praised Stronach as the "best known and most acknowledged Austrian personality in international business making". He added: "Stronach stands for the American �from rags to riches� � or from tool maker to millionaire or billionaire."

Meanwhile, the future of Austrian Bundesliga club Magna Wiener Neustadt seems highly uncertain after main sponsor Magna decided to end its activities by the end of the current season.

Wiener Neustadt SP� Mayor Bernhard M�ller explained today: "Frank Stronach will continue to provide money, but not to the same extent as before."

M�ller � who failed to agree with Stronach over the building of a new, modern stadium � added: "The club will not be dissolved and it will not offer its Bundesliga licence to other clubs."

Stronach said: "I want a continuation of football being played in Wiener Neustadt and will continue to offer my services to the club as a partner as far as its youth department is regarded."

The Magna founder stressed it was important that other people or institutions take over to keep Bundesliga football being played in the Lower Austrian city alive.

Club official Alex Gruber said the plan was to further reduce investments in the senior squad in a bid to establish a "young and hungry team" in the top-flight Bundesliga. Gruber added playing in the second-highest Austrian league was an option as well.

Stronach started subsidising the club only two years ago. Magna Wiener Neustadt managed promotion into the 10-team Bundesliga last season. They led the table earlier this season but dropped to seventh place after three losses in a row.

Ernst Neumann announced last weekend he will resign as vice president of Magna Wiener Neustadt after the current season before the club made clear Neumann did not decide to step down but was fired.

Magna face fifth-placed Kapfenberg this Saturday.

Austrian Times

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