Horst Prelog, president of the Cosma unit of Magna International Inc. , has departed after 10 years in the job amid a management shakeup at the most important division of the auto parts giant.
Mr. Prelog, a 25-year veteran and native of Austria who was recruited by Magna founder Frank Stronach, was replaced by Tommy Skudutis in January, according to documents filed with securities regulators.
The presidency of Cosma is one of the highest-ranking executive positions at Magna. The division has been described as the heart and soul of Magna and has been a leader in innovation both within the auto parts giant and throughout the industry. Its hydro-forming technology uses high-pressure jets of water to shape and form metal tubing for frames and other metal body parts.
Neither Mr. Prelog nor Magna would offer a detailed explanation for his departure, which came just two months after he made a presentation at Magna’s investor day meeting with shareholders and securities analysts detailing a robust outlook for the metal-bashing division.
“When Frank [Stronach]left, the current management was changing direction a little bit and that’s why it was good to leave, for me,” Mr. Prelog said in a brief interview. “Both sides agreed that it was good that we don’t continue any more.”
Mr. Stronach stepped down as Magna chairman in 2010. Later that year, co-chief executive officer Siegfried Wolf left the company and Don Walker became the sole chief executive officer.
“Don has a different style and he wants to run Magna a certain way,” Mr. Prelog said. He would not elaborate.
One source familiar with the situation said he believes Mr. Walker was unhappy with Cosma’s performance.
Cosma employs about 23,000 people at 43 manufacturing facilities in 17 countries and generated sales of $5.1-billion (U.S.) in 2010, according to the presentation made at Magna’s investor day meeting. That represented about one-fifth of Magna’s total sales of $24.1-billion.
The division is likely Magna’s most profitable as well, said industry analyst Mike Willemse, who follows the company for CIBC World Markets Inc. Magna does not reveal profits at individual divisions.
Body and chassis products produced by Cosma range from frames, engine cradles and floor pans, to doors, hoods and other outer body parts.
“Cosma has been extremely successful,” Mr. Prelog said. “We were, and I think we still are, the strongest in the industry in our field, there’s no doubt about it. I think within Magna we are the strongest group.”
In his November presentation, he said Cosma was on track to diversify its customer base by 2015 to 55-per-cent Detroit Three auto makers, 26-per-cent European manufacturers and 12-per-cent Asia-based car companies. In 2010, 69 per cent of revenue was generated by Detroit Three contracts another 24 per cent came from Europe-based companies and just 5 per cent from Asian manufacturers.
Almost one-third of Cosma’s facilities were being expanded, including a plant in St. Petersburg, Russia, that makes components for Hyundai Motor Co.
Managing that expansion now falls to Mr. Skudutis, who retains his job as chief operating officer, exteriors, interiors, mirrors, seating and closures. Adding Cosma to that list means only Magna’s engine components division and its Magna Steyr vehicle assembly business are outside his area of responsibility.
In addition to making Mr. Skudutis president of Cosma, Magna also re-hired John Farrell, a former president of its closures division and appointed him executive vice-president of Cosma.Report Typo/Error