It's no Magna International, but with more than $2-billion in annual sales and 10,000 employees, auto parts maker Linamar Corp. is still an impressive enterprise to have grown in 40 years from the basement of an Eastern European immigrant.
Friday's announcement that Linamar hopes to create about 3,000 new jobs over the next five years in a $1.1-billion expansion of its auto parts operations in Guelph, Ont. has shone a spotlight on the rapidly expanding company, which makes machined parts for cars and trucks and plans to increase business fivefold by 2020.
Linamar was the brainchild of Hungarian-born Frank Hasenfratz, a toolmaker and machinist who came to Canada in 1957 and began a one-man machine shop at his home in 1964 before forming the company two years later.
Now 71, he remains chairman of the Guelph-based company, owning 20.6 per cent of its shares and drawing $2.75-million in salary and bonus last year.
His daughter, Linda, 39, joined the company in 1990 and became chief executive in 2002.
Linamar's story in many ways parallels the development of Magna International Inc., founded in 1957 by Austrian-born Frank Stronach, who immigrated to Canada in 1954.
Mr. Stronach, 73, also remains chairman of his company — with his 2005 compensation totalling $33.3-million (U.S.).
His daughter, Belinda, 40, also tried her hand at management, serving as Magna's CEO for three years before entering federal politics in 2004.
But while Linamar's first-quarter profit was $25.8-million on sales of $583.3-million, Magna earned $212-million (U.S.) on sales of $6.02-billion.
Magna prides itself on its international reach and wide product range, with 84,000 employees in 22 countries, including 22,000 in Canada, involved in everything from making seats and rear-view mirrors to engineering major drivetrain components and plastic body panels and assembling complete vehicles.
Linamar, meanwhile, gets three-quarters of its sales in Canada, concentrating on machined engine, transmission and chassis components.
But it's not without diversification: in 2003 it acquired McLaren Engineering Systems, a specialist U.S.-based firm established in the late 1960s by auto racer Bruce McLaren, which is active in developing racing and other high-performance engines.
Linamar also owns Skyjack, an Ontario-based maker of self-propelled work-platform scissor lifts with heights reaching up to 17 metres.
The company's consolidated January-March sales were up 10 per cent from a year earlier, and would have been up almost 14 per cent if not for the strengthening Canadian dollar.
And the company hopes to increase its annual revenues to $10 billion a year by 2020, from $2.1 billion last year, as it pours money into research and development and new technology to become more competitive in an increasingly consolidating industry.
Like Magna, Linamar, which went public in 1986, is a non-union operation, paying competitive wages and offering performance-linked bonuses.
Linda Hasenfratz — whose name along with those of her sister Nancy and mother Margaret got incorporated by her father in the company's name — got a science degree from the University of Western Ontario and initially worked in the pharmaceutical industry.
She joined Linamar in 1990, taking on jobs ranging from machine operator to operations manager.
She acquired an executive MBA from Western in 1997 and became Linamar's president in 1999. She owns 3.7 per cent of the company's stock, and her pay in 2005 was $2.4 million.
A mother of four children, she is on the board of CIBC and the Royal Ontario Museum.
The year she became CEO in 2002, Linamar earned $57-million on sales of $1.36-billion; last year's profit was $100-million on revenue of $2.16-billion.
Less impressive has been the share-price performance, amid investor worry about Linamar's dependence on parts for large vehicles made by the North American Big Three auto makers, which have been losing market share and cutting production as well as thousands of jobs.
A recent Scotia Capital analysis fretted that Linamar's profit outlook ”could fall further due to negative impacts from GM and Ford capacity rationalization.”
Still the stock has held its own compared with shares of other parts makers, which have been sagging over the last year or so.
Linamar stock, worth $13 per share at the start of 2002, traded Friday at $15.22, up 21 cents on the day, with a 52-week high and low of $17.98 and $10.81.
