Magna emerges from shadows as deal for GM Europe unfolds

May 30, 2009

GM Europe Russelheim

Few people around Europe will have heard of Magna until this week. Now the venture capital giant emerges from the shadows in a proposed bid for GM Europe

The jobs of auto-workers in England and Germany are regional concerns as a deal is thrashed out to rescue GM-Europe from insolvency.

On Friday [May 29th, 2009] a deal was nearing completion after the customary last-moment surprises

Magna is close to signing a memorandum of understanding with parent company General Motors after gaining the advantage [over Fiat] in the race to acquire its European divison by offering to plug a short-term funding gap.

Lord Mandelson said he would seek an meeting as soon as possible with Magna to secure “cast iron guarentees” about the future of Vauxhall’s 5,000 jobs in the UK. He has already met Magna bosses face-to-face to secure assurances they will maintain production in the UK, but accepts jobs will be lost because of GM Europe’s excess capacity.

The global dimension of regional problems

The complexity of such deals unfolds as the public learns of key players around the world. In England, the story is how to protect jobs on Merseyside and Luton plants.

In Germany, according to the usually well-informed Der Speigel

The future of troubled carmaker Opel has become a key political issue in Germany as election campaigning begins. Many politicians favor a proposal by the Austrian-Canadian auto parts supplier Magna, but the plan involves massive risks …

The regional struggles have themselves been heavily influenced by decisions in America over the future of the extremely ailing parent company General Motors which is widely reported to be days away from filing for Chapter 11 bankruptcy.

GM, which has lost nearly $90 billion since 2005, is expected to file bankruptcy in U.S. District Court in New York, where rival Chrysler LLC is undergoing a court-ordered restructuring. President Barack Obama also plans to address the nation Monday on GM’s planned court restructuring.

Clearly, deadlines in Europe are connected with an Obama rescue plan in the States. His political strtegy itself is struggling to deal with political opposition.

Back to Magna

LWD has kept an eye on the happenings at Magna International since 2007.

Our earlier interest focused on the attempt by Magna to take over Chrysler, and the potential influence of Magna’s backing from Russian billionaire Oleg Deripaska.

So the global reach of the story being discussed in pubs in Luton and Liverpool now can be seen to extend to America and Russia.

What happens next?

Watch out for more interest in Magna’s rather unusual corporate governance arrangements.

Mr Stronach emigrated to Canada in the 1950s, and built up a successful auto-business. One of its interesting features is its Governance structure. According to the company web-site,

In 1971 Mr. Stronach introduced his management philosophy, known as Fair Enterprise, to Magna. Fair Enterprise is based on a business Charter of Rights that predetermines the annual percentage of profits shared between employees, management, investors and society, and makes every employee a shareholder in Magna. These rights are enshrined in a governing Corporate Constitution

These considerations may not have been as important as the financial arrangements being brokered at preseent, but may well find favour among the European players in this complex matter.

How Murray the Map-Maker is figuring out clay

May 30, 2009

Andy Murray French Open

Murray squeaks through the first week of the French Open. But he is a quick learner as his post-match interviews show

LWD believes that leadership requires skills at figuring out what to do under tough conditions. Sport offers plenty of examples of how a player reacts to adversity and learns from it.

One way to go ‘behind the headlines’ to see whether you can detect a player’s skill at ‘reading’ a situation. I’ve taken one of Andy Murray’s post-match interviews during the French Open to show what can revealed about his map-making (sense-making) skills.

Murray v Tipsarevic

The match was interesting, if a bit ugly to watch. Tipsarevic came out determined to ‘out-ugly’ his opponent. Murray is himself building a reputation for winning ugly, maybe something he developed while working with earlier coach, Brad Gilbert, who wrote a book on the subject

In this match, the big-swinging Serb attacked powerfully enough to seize the initiative in the first set. At one stage winning rather easily. Error counts were high on both sides. Murray dug deep, and eventually won the set on a tie-break.

The mysterious momentum effect had kicked in. Murray looked a very likely winner. The end came more quickly than expected. His opponent retired after medical breaks at the end of the second set.

How did he do that?

Murray had toughed it out. He had shown similar skills in the previous round, when he turned around another match after appearing to be heading out of the tournament. So what can we learn from the performances?

The winning ugly bit was summed up by a Guardian reporter who had watched Murray train with Gilbert

As a player Gilbert’s approach was – and, as a coach, is – all about strategy, following a game plan, burrowing away, undermining the opponent’s game, getting him to unravel. In a way, though, he has fallen victim to the sound bite popularity of the book’s title, Winning Ugly. It’s not about winning by cheating or trying to gain unfair advantage, but wining despite not being blessed with a naturally beautiful game.

Murray did not get on with Gilbert, and eventually sacked him in favour of a less-qualified bunch of less abrasive acolytes. I suspect Murray is more interested in playing beautiful tennis than he would admit. On clay the beauty at the moment often comes out of desperation when he improvises outrageously when in trouble

The post-match interview

Immediate on-court interviews bring out the laconic worse of Murray. But give him time to reflect, and more interesting ideas are revealed. Here’s an interview made after the Tipsarevic match. I have added comments about Murray’s map-making or analytical skills in the interview:

It was Tipsarevic, 24, who took the initiative with some powerful hitting as Murray struggled with unforced errors in the early stages. The unseeded player broke twice in succession to move 5-2 clear but twice failed to serve out .. It came down to a tie-break and Murray dominated, sealing it with a cross-court backhand winner.
Murray broke at the start of the second set [and] Tipsarevic then called for the trainer to receive treatment on his left thigh. In a match that lacked any real rhythm the world number three immediately handed the break back, but then moved ahead again ..
The increasingly forlorn Tipsarevic now called for the doctor and swallowed some pills at the changeover but was unable to threaten as Murray, still not at his very best, did enough to wrap up the second set. That proved enough for Tipsarevic, who approached the net and shook Murray’s hand after one hour and 51 minutes.

Murray’s analysis

“I didn’t see much wrong with him in the first set. He maybe slowed down his serve a little bit. It’s one of those things that can be tough sometimes when you don’t know how bad someone’s problem is or if they’re going to come out firing.”

[LWD: Murray wonders why he didn’t notice T’s injury, and why he didn’t capitalize more efficiently when it became obvious. ]

“You just fight and try to come back.. and it’s much easier on clay, you get into more rallies.

[LWD: Most players can’t or won’t offer more than a well-worn cliché. Murray ‘reads’ and ‘tests’ the map of how to recover on clay, and finds an explanation for himself, i.e. he is making his own map on winning on clay.]

“One of the things is not to panic if you go behind. One break is nothing – you can always find ways to come back.”

[LWD: more map-making. Maybe earlier matches were lost because he panicked when going behind, and didn’t have a way back, didn’t have a decent map. Now he is sketching out his own map. And it’s personal. And positive. And there is the logic that he, Murray, can find ways back because he has more ways of playing ugly, and more ways or producing the beautiful winner while doing it]

Map Reading, Map Testing and Map Making

I have been fond of the Map Making as a metaphor for Sense Making for some while. Quite a bit more can be found in the book Dilemmas of Leadership.

This example may go some way to explaining the processes applied to the development of sporting leaders such as Andy Murray and the influence of earlier map-makers such as his mentor Brad Gilbert.


Image acknowledged from the tennis blog by Paulo Cleto