Magna Donnelly Tabs New CEO

January 13, 2003
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HOLLAND — The new chief executive at Magna Donnelly comes to the company with a wealth of experience and knowledge in the global auto industry, as well as a reputation for aggressively pursuing price reductions from suppliers.

Carlos Mazzorin, a retired Ford Motor Co. executive who headed the automaker’s global purchasing, joined Magna Donnelly just before Christmas as chairman and CEO. Mazzorin will manage the company from Magna Donnelly’s office in Livonia, although its headquarters will remain in Holland.

Mazzorin “is a proven leader and an expert in global business,” said Beverly Snyder, communications manager for the Holland-based Magna Donnelly.

“He’s somebody with great global experience that can help our company grow and create long-term value to everybody involved,” Snyder said. “He’s a great addition to our team.”

Mazzorin, according to parent company Magna International Inc., “will direct the business in conjunction with the board of directors,” along with former CEO Dwane Baumgardner, now the vice chairman, and Executive Vice President and Chief Operating Officer Peter Schmied, an 18-year Magna International executive who joined Magna Donnelly in October following the acquisition of the former Donnelly Corp.

The appointment represents the strengthening of the Magna Donnelly management team as the integration of Donnelly and Magna proceeds, said Jim Warren, director of communications for the Aurora, Ontario-based Magna International. Mazzorin’s hiring, Warren said, is not considered a demotion for Baumgardner, the long-time head of Donnelly.

“It’s definitely a strengthening of the bench. The company, as a whole, is going to be stronger,” Warren said. “They’ll work together as a team and make the most of the integration of the two companies.”

Mazzorin, 61, retired from Ford in November after serving the final three months of his 30-year tenure as senior adviser to Chairman and Chief Executive Officer William Ford Jr. Mazzorin previously served as Ford’s group vice president for Asia Pacific Operations and South American Operations, and global purchasing, handling the latter duties for several years.

The hiring, announced Jan. 6 by Magna International, gives Magna Donnelly an industry veteran who at Ford was known for demanding and securing deep price reductions from suppliers, rather than working with suppliers to identify ways to cut the automaker’s costs.

“He was the tough guy on the part of Ford,” said James Gillette, an industry analyst with IRN Inc. in Grand Rapids. “This is going to be very interesting to see what happens. He’s going to be on the other side now.”

Gillette wonders whether Mazzorin will institute the same kind of pricing practices for Magna Donnelly’s suppliers that he used at Ford. The practice damaged the automaker’s relationship with its suppliers and led to quality problems. If pursued again, it could cause problems for firms that supply Magna Donnelly, he said.

“If he starts using the techniques to cut the prices at Magna Donnelly that he used at Ford, it could very tough for them,” Gillette said. “The fact is it did not lead to good results at Ford.”

In an automotive industry where automakers are constantly seeking cost savings from suppliers, whose margins and earnings are being increasingly squeezed, Magna International has always pursued a policy of seeking the “best product at the best price” from its suppliers, Warren said.

“As long as they produce the best product at the best price, they’ll continue to enjoy the status that they have now,” Warren said.

Magna Donnelly, the world’s largest producer of automotive mirrors with annual revenues of $1.2 billion, was created last year when Magna International acquired the former Donnelly Corp. in a $415 million stock-and-debt deal.

In recent years, prior to the Magna buyout, Ford was Donnelly Corp’s. largest customer, accounting for about 27 percent of annual sales, Snyder said. Ford now represents about 19 percent of the business for the larger, combined Magna Donnelly business unit, she said.

The business ties, combined with a long-standing friendship between Mazzorin and Baumgardner, means the new CEO, even though he came in from the outside, is well acquainted with Magna Donnelly, Snyder said.

“He is somebody who really understands our industry and knows us, and we know him,” Snyder said. “There’s a good working relationship there we’ll be able to build on.”    

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