PodcastsThe Jordan B. Peterson Podcast396. Magna CEO on Turning Five Thousand Dollars Into One Billion | Frank Stronach

396. Magna CEO on Turning Five Thousand Dollars Into One Billion | Frank Stronach
The Jordan B. Peterson PodcastMon Nov 13 2023
Founder's Journey:
- Frank Stronach discusses his personal journey of immigrating to Canada with minimal resources, starting from humble beginnings, and eventually building a massive business empire.
- He emphasizes the importance of determination, practical experience, and the ability to adapt to new environments as crucial factors in his success.
Business Philosophy:
- Stronach shares his unique management philosophy known as Fair Enterprise, based on an economic Charter of Rights advocating for input, autonomy, and profit sharing among all workers, management, shareholders.
- He stresses the significance of fortifying human charter rights with an economic charter of rights for the development of economic democracies which form the basis for democracy itself.
Empowerment through Profit Sharing:
- Magna International's corporate constitution predetermines the percentage of profits shared between shareholders, employees (in both cash and shares), management, charity, and reinvestment for research.
- By empowering employees through profit sharing, Stronach observes a significant increase in profits and attributes this to releasing an enormous energy within the workforce.
Challenges Faced by Large Businesses:
- Expresses concern about large businesses being driven solely by institutional interests rather than genuine affinity towards people or products.
- Discusses how cumbersome bureaucracy hinders small business growth and suggests that it is increasingly challenging to start a business due to excessive regulations.
Economic Model Advocacy:
- Proposes an economic model where companies with over 300 employees are mandated by law to share profits with workers while allowing smaller businesses to operate under pure free enterprise principles.
- Emphasizes that failing to let workers participate in profits can lead to societal problems and highlights the need for change at a systemic level rather than blaming individuals or using forceful methods.
Corporate Constitution and Profit Distribution:
- Frank Stronach's model emphasizes more generous profit distribution and formalizing the distribution, leading to increased productivity.
- He attributes the lack of acceptance of his economic model by other companies to factors such as complexity in corporate governance for public companies, which has made it too complicated. This complexity impedes entrepreneurial development.
Regulatory Burden and Bureaucratic Stagnation:
- Stronach discusses the increasing regulatory burden on starting a business today, emphasizing that societies tend to accrue more rules over time, leading to stagnation.
- He notes the challenge of clearing out regulations impeding entrepreneurial development and mentions that politicians can't address this due to systemic issues.
Micro-Mobility Electric Vehicles:
- Frank Stronach introduces a new small electric car designed for urban commuting, highlighting its ability to park four cars in a regular parking spot and its low operating cost.
- The vehicle is designed with minimal insurance requirements due to restricted speed and aims to provide reliable transportation with no greenhouse gas emissions.
Agricultural Focus and Organic Food Access:
- Stronach expresses concern about industrial farming practices' impact on health, allergies, and diabetes, aiming to ensure Canadian children have access to organic breakfasts and lunches at school.
- His main goal is focused on preventing Canadian children from going hungry by providing organic meals at schools while addressing concerns about chemical use in agriculture.