Magna International Inc. announced president Seetarama (Swamy) Kotagiri will take the wheel as chief executive in January, tasked with leading its expansion into self-driving cars and electric vehicles.
Mr. Kotagiri is replacing Don Walker, aged 64, who plans to retire at the end of the year after 22 years as CEO and 33 years in leadership roles. In an interview on Tuesday, he said that Mr. Kotagiri won the top job in part because of his success in integrating technology from outside the sector into Magna’s manufacturing operations, in areas such as electric-powered and self-driving cars.
“Our industry is complicated and fast changing,” Mr. Walker said. “Working closely with Swamy over the past six years, I recognized he has the readiness and the interest to lead Magna.”
The incoming boss at Aurora, Ont.-based Magna is a 51-year-old engineer who has been awarded 12 patents for his work. Mr. Kotagiri joined Magna in 1999 and spent the past six years as the company’s chief technology officer. He was named president in January.
Mr. Walker said while he enjoys being CEO of a global company – “it’s an interesting, challenging job” – he is looking forward to working on several personal projects after retirement. Those initiatives include engaging his passion for industrial policy and tax, and an industry-wide project to lower carbon emissions from vehicles. He said: “It is a good time for fresh blood and new ideas at Magna.”
The auto industry is at a crossroads, with many manufacturers shifting from gasoline-powered vehicles to electric cars and trucks. In a conference call, Mr. Kotagiri said Magna sees opportunities to boost sales of electric-vehicle components and to build entire models as consumers move toward these cars. However, the incoming CEO said Magna will strive to be “agnostic” about a vehicle’s power source by trying to be the key supplier for cars and trucks that run on fossil fuels, batteries or hydrogen.
“Given the accelerating dynamics in the automotive industry, our sense is that the next stage of Magna’s evolution will be more focused on new mobility developments, such as vehicle electrification and autonomy,” analyst Peter Sklar at BMO Nesbitt Burns said in a report. “Given the pipeline of initiatives that Magna will undertake over the next few years, we believe it makes sense that Swamy Kotagiri assumes the CEO role at the beginning of the pipeline as opposed to midway through.”
As CEO, Mr. Walker moved Magna into assembling entire vehicles for clients such as BMW, Daimler, Jaguar Land Rover and Toyota. Mr. Kotagiri said he plans to expand that division of the company, which to date has produced 3.7 million cars and trucks on Magna-owned assembly lines.
Mr. Walker said he and Magna’s board selected Mr. Kotagiri as CEO in part because he has spent 21 years at the company and understands the “decentralized, entrepreneurial culture” developed by founder Frank Stronach, who launched Magna from his garage in 1957. Mr. Walker said bringing in “an outsider would be a disaster.”
Mr. Stronach gave up control of Magna in 2010. Since then, the company’s stock has increased sixfold. Mr. Walker is Mr. Stronach’s former son-in-law; he was married to Belinda Stronach, who also served as Magna’s CEO prior to running for political office. The couple divorced amicably in 1995. Mr. Walker was Magna’s CEO from 1994 to 2001, then ran a publicly-traded subsidiary of the parent company before returning to the top job in 2005.
Looking back, Mr. Walker said one of his few regrets while running Magna is occasionally moving too slowly on international expansion, as “we were a little late moving into China.” He said the company’s global reach is expected to expand – it currently operates in 27 countries with 152,000 employees, including 20,000 working in Canada.
Mr. Kotagiri’s promotion likely comes with a significant raise. Last year, as Magna’s president, he was the company’s fourth-highest paid executive, with a US$3.7-million pay package. The company’s CEO, chief financial officer and chief operating officer all made more than its president. As CEO, Mr. Walker earned a total of US$18.2-million last year.
Mr. Kotagiri started his career at General Motors Co., working as a structural analyst for four years before joining Magna. He did an undergraduate degree in India, then moved to the United States to do a masters in mechanical engineering at Oklahoma State University. In his personal LinkedIn profile, Mr. Kotagiri said he arrived in Oklahoma in 1993 with US$40 in cash, and only enough in the bank to pay for one semester of tuition. Support from the school’s dean of engineering helped him to graduate two years later.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.