Magna CEO to step down in the new year
Canadian auto parts company Magna International Inc. has chosen company veteran Seetarama Kotagiri as its new chief executive amid the retirement of Don Walker, who led the company through turmoil to growth.
Kotagiri will become chief executive on Jan. 1, 2021, replacing Walker who will retire at the end of this year after a 33-year career at the company.
Walker served as Magna’s chief executive between 1994 and 2001 before returning to the job in 2005. During his time at Magna, Walker also worked as vice-president product development and engineering, chief operating officer and president, in addition to being chief executive of Intier Automotive Inc., one of Magna’s former publicly traded subsidiaries, between 2001 and 2005.
Kotagiri noted that over the last 15 years of Walker’s leadership, sales grew from US$23 billion to about US$40 billion. Magna now has 346 manufacturing operations and 93 product development, engineering and sales centres in 27 countries.
“We’ve gone through some pretty difficult times in my 33 years. I took over as executive vice president of operations back in 1989, when the company was just slightly over US$1 billion. I’ve seen a lot of changes through near-bankruptcy ? all the way through to the massive downturn in `08 and `09. And this challenge with COVID-19,” said Walker.
Kotagiri, who is currently Magna’s president, has more than 25 years of automotive industry experience including 21 years with the company. He inherits the CEO title after the company’s recent quarterly report showed its first operating loss since 2009, amid a “precipitous decline” in global auto manufacturing during the COVID-19 pandemic.
But board chairman William Young said the company has been working on a succession plan for five years. Kotagiri has already been taking the lead on strategic decisions, Walker said.
“Running a company, to me, is kind of like playing a chess game, moving the pieces around. I’m very healthy and could have worked for another five years. I guess I could have retired five years ago,” said Walker.
In Kotagiri, the company finds a leader with a technical background as the industry adapts to massive shifts – including a push for electric vehicles and autonomous driving – at a time when local auto manufacturers are fighting to keep domestic production lines. Kotagiri has also been Magna’s chief technology officer and held several leadership positions including president of Magna Electronics, Magna Powertrain and the company’s power and vision segment.
Last week, the company said it will be helping to manufacture an electric SUV for startup Fisker Inc. in Europe. Both Ford Motor and Fiat Chrysler announced this fall that they are moving toward electric vehicle production at some of their Canadian plants.
“When we talk about our portfolio in terms of the body and chassis system, seats… the products might evolve, but it will continue to be very relevant in the next decades to come,” Kotagiri said in response to a question about the transition to electric vehicles.
“In the powertrain, we have always been focused on bringing power to the wheels, as we say, agnostic to the power source. Whether it be battery or hydrogen, we should be able to do that.”
Under Kotagiri, the company has taken a “modular” approach to car building, allowing it to assemble a complete vehicle or offer “building blocks” for powertrains or reconfigurable seating.
Despite recent challenges opening plants up safely amid the COVID-19 pandemic, Kotagiri said the company is well-positioned moving forward, since the modular approach helps the company adapt quickly to changes in the industry.
Walker credited cultural continuity as a key part of the decision to promote Kotagiri, noting that Kotagiri was the “right age” to lead the company for the next decade. Walker traced the company’s culture and compensation system back to founder Frank Stronach, and said the company is trying to make sure the company’s culture is promoted globally.
“Magna is a big company in Canada. We grew big globally ? but because our head office is here I think it’s important to have somebody that understands where our roots are and is supportive of what we do in Canada. We do a lot in the community.”
Kotagiri said he plans to preserve Magna’s culture of egalitarianism, which allows employees to be entrepreneurial despite the company being led by veterans with 20 years experience or more.
“When I grew up in India, my family never owned a car. It gives me all the more reason to believe that freedom of mobility for everyone is so important. I truly think that mobility and transportation have a significant influence on economic growth,” said Kotagiri.
“Where you travel, and how much you travel, shopping, going to school, going to work, is all impacted by freedom of mobility. That is why I get so excited to advance the development of innovative, sustainable products.”