Former penniless toolmaker could own Opel

Magna International chairman Frank Stronach, who left Europe a virtually penniless toolmaker over 50 years ago, will return to fashion a carmaking dynasty if his audacious bid for Germany's Opel comes off.

The 76-year-old Magna founder -- a rags-to-riches tycoon with a passion for soccer, hard work and fast horses -- emigrated to Canada aged 21 with $200 and a suitcase.

Now his auto parts firm is in the running for an Opel stake along with Italy's Fiat after marathon overnight talks between bidders and the German government whittled down the list of suitors but ended without a deal.

The son of a labour rights activist father and a factory worker mother, Stronach left school aged 14 to become a tool and die apprentice at a factory in Weiz, the town in the southeastern foothills of the Austrian Alps where he was born.

His personal fortune is now estimated at over $1 billion, but when he arrived in Canada, Stronach's first job was peeling potatoes and washing dishes in a hospital kitchen.

"I experienced what it was like to be hungry, to be discriminated against and to be treated unfairly," Stronach has said. He now prides himself on treating his workforce well. Staff receive a share in company profits and individual plants are run as independent entities.

After a string of rejections, Stronach got his break with the small tool and die company he went on to manage.

Now, more than half a century on as an unprecedented crisis engulfs the automotive industry, Stronach is setting his sights on Europe and Russia with a bid to grab a stake in the long-established German brand General Motors is hiving off as it battles for survival. He is pitted against Fiat in a run-off after fellow bidder RHJ International was ruled out of the race on Wednesday though a last-minute entrant from China, BAIC, could still be in with a chance if it presents a more detailed offer.

Stronach is betting firmly on the future, hoping to grab an initial 20 percent slice of a market that was until recently expected to overtake Germany as Europe's biggest this year or next: Russia.

If Magna is successful, the company that started out in a Toronto garage over 50 years ago would emerge as a major player in the cutthroat Western European auto market, competing against the likes of Fiat, BMW and Volkswagen AG, all of which Magna currently counts as customers.

Stronach's reputation as a fair boss led Opel labour leaders to favour Magna's bid, until comments on possible job cuts and plant closures made by the group's co-Chief Executive caused outrage.

Magna, the world's third largest automotive parts supplier by revenue, whose headquarters sit amid rolling Ontario farmland 50 kilometres north of Toronto, is partnering with Russia's largest lender Sberbank on the 700 million euro Opel bid.

Under the arrangement, Sberbank would take 35 percent of the company, Magna 20 percent, Opel's employees 10 percent and GM the remaining 35 percent.

Russian carmaker GAZ Group would be an industrial partner under the plan.

Stronach is married with two children -- daughter Belinda is a former MP and former CEO of Magna and son Andrew is involved in thoroughbred horse-racing, a passion shared with his father.

Stronach senior set up Magna Entertainment Corp, which owns and operates racetracks in the U.S. and Austria, but which earlier this month filed for Chapter 11 bankruptcy protection.

"There's a big legacy thing going on here," said IHS Global Insight auto analyst Tim Urquhart, about the Opel bid. "I think he wants to turn himself into a big OEM (original equipment manufacturer) ... and this will be a sort of legacy to his company."

If Stronach achieves this aim, the man who started out working 16-hour days, sleeping next to his lathe in a Toronto garage, will secure a place in history for his company.

And if his bet pays off, Magna may find itself jockeying for pole position once the auto industry bounces back.