Magna CEO on Turning Five Thousand Dollars Into One Billion | Frank Stronach | EP 396

Added: Nov 14, 2023

Stronach's journey began when he immigrated to Canada in the 1950s with a small amount of money and practical experience. He struggled to find a job and faced hunger and hardship, but eventually found work in an engineering and production company. After saving up $5,000, he rented a garage and started his own business, which grew rapidly over the years.

One of the key principles Stronach emphasizes is the importance of empowering employees and sharing profits with them. He implemented a corporate constitution at Magna International that predetermined the distribution of profits, with 20% going to shareholders, 10% to employees, 6% to management, and 7% reinvested for research. This approach led to a significant increase in profits and energized the workforce.

Stronach also advocates for the implementation of an economic Charter of Rights, which would allow workers to share in the profits of large businesses. He believes that economic democracies are the basis for overall democracy and that sharing profits with employees is essential for a thriving economy.

In addition to sharing profits with employees, Stronach emphasizes the need to open up small enterprises and reduce regulations that hinder their growth. He believes that small businesses are the backbone of any country and play a crucial role in innovation and job creation. He highlights the need to remove red tape and allow small businesses to operate under pure free enterprise principles.

Stronach also discusses the importance of trust and communication in the workplace. He emphasizes the need for managers to be respected by the workers and highlights the significance of smaller factories where managers can have a personal connection with their employees. He also implemented a hotline for employees to report any unfairness or discrimination anonymously, which has been effective in addressing workplace issues.

In addition to his corporate governance model, Stronach talks about the challenges of regulatory burdens and the need to simplify the system to encourage entrepreneurial development. He also shares his vision for a new product, a small electric car designed for urban commuters, which aims to provide low-cost transportation and reduce reliance on nonrenewable energies.

Lastly, Stronach expresses his concern about the impact of industrial farming on the environment and public health. He advocates for organic and nutritious food for Canadian children, emphasizing the need to address the chemical jungle created by industrial farming practices.