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After 50 years Frank Stronach is stepping down as chairman of Magna International.Fred Lum/The Globe and Mail

The end of an era in Canadian business and in the life of Frank Stronach came quietly, a stark contrast to the tumult, noise and controversy that accompanied the expansion of Magna International Inc. into a global powerhouse.

The departure of the 78-year-old chairman of Magna from that office was revealed in a few sentences in the circular for the company's annual meeting, the final step in the easing of the iron grip he once held on the company.

Mr. Stronach's automotive career began when he set up a tool and die shop in a Toronto garage in 1957. His decision to step down comes after 54 years in which he turned that business into one of the five largest global auto parts makers, powerful enough to make takeover bids for Chrysler and European auto maker Adam Opel, and the centre of an empire that at times included racetracks, magazines and a restaurant.

He recalled Thursday that when he opened the shop at age 25 – sometimes sleeping in a cot on the premises – he had no idea how big it could grow.

"When you start out, nobody thinks in those terms," he said. "At that time I just wanted to accumulate some monies that I would never be hungry or my family wouldn't be hungry. As you accumulate experiences, know-how, your horizon gets wider and wider."

Those experiences led eventually to what is now known as the Magna culture, which is credited by company executives, former executives, analysts and others with being a key element that helped underpin its expansion and financial strength.

The compensation system of letting plant managers keep a portion of the profits their factories generate –and also sharing the wealth with employees – is a crucial part of that system, along with an employee charter of rights and corporate constitution.

He was offering profit sharing "at a time that no one even knew what it was," said a former senior Magna executive. "In fact, I think Frank's true genius is his ability to make things simple enough that they work."

While the culture was the cornerstone, the rise of Magna coincided with tectonic shifts in the industry, such as the 1965 Canada-U.S. auto pact and the move by auto makers – particularly the Detroit Three in the 1990s and 2000s – to outsource much of the assembly of components to parts makers.

"I moved very quickly on that," Mr. Stronach said when asked about the role of the auto pact. "I opened up factories."

The auto pact, which created an integrated North American auto industry, gave him the opportunity to build a continental business, something that no one was able to do before 1965, said Dimitry Anastakis, a history professor at Trent University in Peterborough, Ont., who has written extensively about the auto pact and 20th century Canadian business history.

"Before the auto pact, there was nothing in the industry that was indigenous or large scale that was Canadian-owned or Canadian operated that provided direct benefits for Canadians," Mr. Anastakis said.

He described Mr. Stronach as a Canadian "industrial revolutionary."

"There's only three products and three firms that really make a difference globally," he said. "There's RIM [Research In Motion] there's Bombardier and there's Magna."

Nonetheless, Mr. Stronach's rags-to-riches story – he arrived in Canada from his native Austria in 1954 with about $40 in his pocket – has been marked by controversy.

The high-growth years of the 1990s were turbulent, marked by criticism of his compensation, forays into non-automotive ventures such as a proposed theme park in his native Austria, his failed effort to overhaul the North American horse racing industry – one of Mr. Stronach's passions – and most recently, the massive premium he sought to buy out his controlling interest in the company.

That premium amounted to more than $860-million (U.S.) and was sweetened last year by profit-sharing and consulting contracts that provided him another $60-million, according to the circular for the annual meeting.

His annual compensation even before the buyout of his multiple-voting shares ran into the hundreds of millions of dollars over the years and made him a lightning rod for criticism by corporate governance advocates.

Helping balance that out, however, were the contributions he and the company made to Canada, because as long as Mr. Stronach was chairman, he was Magna.

"Magna's part of his blood," said one long-time director who left the board several years ago.

To cite one example, when the company won a ground-breaking contract in the early 1990s to use a new technology called hydroforming to manufacture frames for General Motors Corp. pickup trucks, the company was courted by several U.S. states hoping to land the new Magna plant.

Magna could have received large subsidies to locate in several Midwest states. But Mr. Stronach all but decreed that the plant would be built in St. Thomas, Ont., where the Magna unit that is now called Formet Industries still employs about 1,200 people.

His success in auto parts has been duplicated in horse racing and breeding, where he has been one of the leading owners and breeders for decades. But his move into the ownership of racetracks and gambling activities was a major flop.

Magna bought Santa Anita Park near Los Angeles in 1998, contributing to a revolt among shareholders that eventually led to the spinoff of that business and other tracks as Magna Entertainment Corp. (MEC).

But at MEC, he appeared to forget or ignore the hard lessons on debt he had learned at Magna, when a debt-fuelled burst of growth pushed the auto parts company to the brink of bankruptcy in 1989. MEC piled up debt of more than $500-million in an acquisition spree and tumbled into Chapter 11 bankruptcy protection in 2009.

There were other missteps. He jumped into politics in 1988, running for the Liberals in the free-trade election, but he was trounced.

Former Ontario premier William Davis, a Conservative and now a retired Magna director, joked Thursday that that move represented Mr. Stronach's one philosophical error.

But Mr. Davis noted that he turned Magna into a leading Canadian and global company and provided jobs for thousands of employees.

After the 1989-1990 Magna crisis, debt became a swear word at the auto parts company. The company carefully hoarded cash through the 1990s and 2000s, even as it expanded in Europe and gobbled up smaller rivals in seat making, metal forming and plastic body parts. In a critical move that expanded Magna's breadth, he led the purchase of Austrian contract auto maker Steyr-Daimler-Puch AG in 1998.

That gave Magna a window into complete vehicle manufacturing, and the heft to bid for Opel when GM put it up for sale during the Detroit auto maker's trip into bankruptcy protection.

GM later killed the sale after the German government had anointed Magna as Opel's saviour. The failure to win Opel ended Mr. Stronach's dream of turning Magna into a Canadian-owned auto maker.

But the careful buildup of the cash pile left Magna in superb shape to withstand the 2008 global storm that took down Chrysler, GM and many auto parts makers.

Mr. Stronach acknowledged Thursday that his career included highlights and "shadows" but he said he has no regrets.

That includes the fact that neither his daughter Belinda, who vaulted from Magna into federal politics and back to Magna again before leaving the company last year, nor his son Andrew will take up where he is leaving off.

"In business, you shouldn't have emotions," he said. That's a typical statement from Mr. Stronach, who would use the platform of Magna's annual meeting every year to offer an off-the-cuff sermon to shareholders, company employees, politicians, auto industry executives, the media and the world at large.

Among the bits of wisdom he offered up at those meetings and in hundreds of other conversations was this: "Money has no heart, no soul, no conscience, no homeland."

He's stepping down, he said, even though he considers himself still young.

"Society's getting very complex. So many rules, so many regulations that you can't move. I'm an entrepreneur. I need a little more freedom."

He will retain a seat on the board and became honorary chairman of Magna, which is now the world's fifth-largest auto parts company. With its 16,275 employees in Canada, it is the largest automotive employer in the country.

As part of the deal to give up his controlling shares, Magna spun off to him its electric vehicle business. He is now controlling shareholder and chief executive officer of that business.

In another deal, in which he surrendered control of MI Developments Inc., a real estate company that owns the land under many Magna parts plants, he picked up control of racetrack and gambling assets worth between $585-million and $730-million.

The tracks include Gulfstream Park near Miami, Santa Anita Park near Los Angeles and MI Developments' share of a joint venture that runs two tracks in Maryland.

That will allow him to continue to pursue his long-held conviction that he can repair the battered North American horse racing industry.

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THE QUOTABLE FRANK

"You can't just fly in from the sky and be a manager."

In 1985, on working the way up from the factory floor.

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"We were so lucky we didn't get it."

On the failed 2007 bid for Chrysler, which fell into bankruptcy protection two years later.

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"I should get more."

In 2003, on his $58-million pay cheque.

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"It's a free country, if they don't like it, they should sell their shares."

In 2004, after facing angry shareholders over a $54-million pay package and dual-class share structure.

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