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Team Stronach

In the summer of 2012, Austro-Canadian billionaire Frank Stronach (Magna International) founded a new right-wing party in Austria calling itself “Team Stronach”. Thanks to five defectors from other political organisations, his party enjoyed the status of a parliamentary faction from the beginning of November 2012.

Stronach recruited his parliamentarians primarily from the ranks of the right-wing Alliance for the Future of Austria (BZO, Bündnis Zukunft Osterreich), a split-off from the far-right Austrian Freedom Party (FPO, Freiheitlichen Partei). The new parliamentary group consists of Christoph Hagen and Elisabeth Kaufmann-Bruckberger from the BZO, independents Stefan Markowitz and Erich Tadler…and Gerhard Köfer of the Social Democratic Party of Austria (SPO, Sozialdemokratische Partei Osterreichs).

Team Stronach was also represented in some state legislatures, where the defectors were also not just from the traditional right wing. More and more Social Democrats and trade union officials were joining.

Köfer, the Social Democratic parliamentary deputy from Carinthia, and also mayor of Spittal an der Drau, and his deputy and party colleague Hartmut Prasch defected to Stronach’s party. Former Linz chief of police Walter Widholm was named as head of Team Stronach in Upper Austria. Widholm had been an SPO member for decades. His deputies included the chair of the Austrian Pig and Beef farmers’ lobby group, Leo Steinbichler.

The BZO had been in a deep crisis for a long time and, according to the latest opinion polls, will fail to gain representation in parliament at the next elections. The party suspected that its defectors to Stronach had been bought and paid for. State attorneys are currently investigating a lawsuit filed by the BZO against the billionaire businessman. Three BZO parliamentary deputies have given legal depositions claiming that Stronach and his people had tried to solicit them with large sums of money.

BZO party leader Josef Bucher said Stronach “offered him €500,000 for immediate payment”. Another BZO parliamentary deputy said that he had been offered a million euros by a Stronach confidante in the event of switching his loyalty. In Austria, bribery involving more than €50,000 euros can earn someone a prison term of up to 10 years.

Given Stronach’s considerable private fortune, the new outfit was better funded than some of the establishment parties. According to press reports, Stronach intended to put €25 million into the party. “Frank has said we want to be the strongest party in Austria, and was ensuring we are financially well provided for”, said the designated group chair of Team Stronach, Robert Lugar.

In addition, Team Stronach enjoyed state funding. The new group will receive €1.4 million in such funds. This will cost parliament €2 million a year, since the costs for rooms and personnel will also be taken over. Parliament will have to dip into its reserves, parliamentary president Barbara Prammer (SPO) said.

Stronach is the founder and head of global auto supplies concern Magna International. The company employs 115,000 people in 26 countries and has an annual turnover of €28 billion. In 2009, Magna tried to take over General Motors’ German subsidiary Opel, with the support of the IG Metall union. Stronach’s personal fortune amounted to around €1.3 billion.

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.

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 had 74,000 employees in 25 countries, with pre-crisis sales of $20 billion per year.

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.

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.

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. Magna's European head and leader of the Opel takeover bid, co-CEO Siegfried Wolf, came from similarly humble origins (an Austrian farming family) and may reflect Stronach's affinity for "self-made" individuals over the established elite.

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.

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.

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.