Magna International has powered from being a US$2bn to US$28bn company in 20 years, assembling, under contract, a variety of models such as the Mini Countryman and Peugeot RCZ, at the same time as operating a global series of component arms employing 108,000 people. In his second interview, Magna International Europe president Guenther Apfalter talked to Simon Warburton at the company’s HQ south of Vienna about the ownership structure, legislation and the assertion the company is a “fleet of small, fast boats.”
j-a: How much influence does Magna International founder Frank Stronach exert now following his sale of the majority of shares last year?
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GA: “Frank Stronach has mainly stepped out and is still part of the Magna board – of course we listen to him. He is here in Europe on a regular basis every second month and we have regular appointments. He is still very interested in what is going on with Magna.”
j-a: How would you characterise the nature of Magna’s business and can you see it losing its independence at some point?
GA: “Magna is one of the most diversified automotive suppliers – we supply everything with the exception of glass and tyres. When Magna entered Europe, it acquired Steyr and gave them the capability to design and engineer complete cars. We call it a one-stop solution.
“It is absolutely our goal to stay independent. We always have to think about our business model and our footprint.”
j-a: PSA Peugeot Citroen’s recent announcement it will form an alliance with General Motors has caused quite a stir in Europe – how might that play out for Magna?
GA: “We had some interesting meetings in Geneva [motor show] about alliances and this could present some business opportunities for us. When two OEMs try to save costs and be more competitive in putting platforms together, this could [drive] engineering work for us. When the OEM does not have resources for other platforms, then this gives us opportunity for future business.”
j-a: You exhibited the Mila concept study with glass panels in the soft folding roof at Geneva – is the fair important to Magna?
GA: “Geneva was good and we were satisfied. This [concept] is just a demonstration of our capabilities. What we hear from customers and people just passing by – it could be very interesting with the roof.
“Geneva is always good for us because it is the first fair in the year. You have all the decision makers in one room. Geneva is always a full stop statement, very important.”
j-a: To what extent is Magna involved in C02 reduction?
GA: “When we take the entire discussions around C02 emissions, we involve our lightweight [divisions] giving our customers the applications of lightweight to reduce C02 emissions. We spend significant amounts…in terms of development and innovation.
“European union emissions legislation – we do our contribution in this respect. When you compare North America and Europe, in North America you have 300m people, one language and one culture. In the European Union there are 27 nations and I don’t know how many languages. As long as the legislation stays reasonable, it makes sense. We are very well linked to Brussels – we are part of the CLEPA [European supplier association] organisation.”
j-a: How will Magna International grow in the future?
GA: “What we don’t do is make acquisitions that are far away from our core business. In 1992, Magna was a US$2bn company and last year we were US$28bn – this is done through organic growth.”
j-a: What is the status of Magna’s industrial relations?
GA: “We describe Magna’s business model as not a big tanker sailing through the sea – we are a fleet of small, fast boats with the capability to follow our customers. Management stands up in front of employees and tells them what they contribute to the company’s success in a very simple and pragmatic way [Magna management also took a pay cut along with employees in the global crisis of 2009].
“We have to continue to do restructuring in some of our plants – we have to find the balance between our existing plants and Eastern Europe – it does not mean we close plants in Western Europe.”
j-a: Are there new areas Magna is working on and how do you view alternative power development ?
GA: “New materials such as composites for example and combining steel and aluminium, virtual development to shorten time to market. Also, being part of the discussions such as mobility concepts together with government institutions. You can only achieve this through [a combination of ] the government, automotive suppliers and OEMS as well as companies providing power.
“We should do more in this respect [but] how long do politicians stay in their function, because we are planning 25 years ahead. Electric cars are a niche – we do a lot in this respect. To push this more, it needs a bigger concept for the future, [it] needs an integrated approach because we need the necessary infrastructure.”
j-a: Are there new developments you can reveal?
GA: “There is enough room for existing technology improvement – improving the comfort level and entertainment level in the car. The real breakthrough when you look back, it is more evolution than revolution. I don’t see a big bang in the next 10 years.
“We are a small player for tanks [for example] but, in our fuel caps, we are one of the main players in Europe. We have more than 50% of [the] fuel caps business in Europe.”
