TRAVERSE CITY, MI –International Inc. CEO Mark Hogan spent all spring working on the potential takeover of Group, planning to make the company another decentralized unit of the Canadian supplier.
“Many people thought it was a crazy idea, a supplier bidding on an OEM,” Hogan explains to attendees at the Management Briefing Seminars here. “But a customer had a need, and we were there to participate and help.”
He recalls thathad given a seating contract for minivans in the early 1990s and helped save Magna from potential bankruptcy, and Magna saw DaimlerChrysler AG’s desire to sell off Chrysler as a chance to return the favor. It didn’t approach the bid process with a mentality of a takeover, he says.
Magna has a close relationship with the auto maker, with 22,000 of its 85,000 employees working on Chrysler projects, including the operation of the Jeep Wrangler paint shop in Toledo, OH.
“There are Magna parts in every Chrysler assembly plant in North America,” Hogan says. “It didn’t seem like an odd move to any of us.”
Why did Cerberus Capital Management LP win the bidding?
“We looked at it operationally,” he says. “It turned out to be a financial transaction.”