Siegfried Wolf was co-chairman of parts giant Magna International, when Russian billionaire Oleg Deripaska convinced him to help oversee efforts to modernize Soviet-era auto maker GAZ in Nizhny Novgorod.
Wolf led Magna into a parts-making partnership with GAZ in 2006, which had recently been acquired by Deripaska. The partnership talks resulted in Deripaska becoming a strategic investor in Magna in 2007. He ended up selling his stake the following year.
Later, with Magna founder Frank Stronach retiring and intrigued by what Deripaska was doing in Russia, Wolf decided it was a good time to move on. He became a member of the GAZ board in 2008, and in 2010 he was named board chairman. He also serves as chairman of Russian Machines, the company that controls GAZ.
In Nizhny during the launch of Chevrolet car assembly at GAZ, Wolf talks about his decision to join Deripaska’s operations in Russia:
Magna acquired Steyr in 1996. There was a business in diesel engines here in Nizhny Novgorod, and I was flying here to see what value this had. I saw it and came home and said “zero.”
In 2005-2006, the Russian hype started with the auto industry, and I said I have to go once more and see, because Magna has to expand. I came here (to discuss a possible partnership with GAZ), and I was a little bit nervous.
I went on the shop floor and saw a young guy – I think in those days he was 36 years old – and he was training his people (in the Toyota Production System). People had said they would bring me together with the new owner of this group, and I was looking around as to who it was. And (the man training on the line) stood up and said, “By the way, my name is Deripaska, nice to meet you.” (Laughs)
That was my first meeting with this guy. He was on the shop floor training people, educating them and showing them what modern competition means. Then I started to discuss with him other projects, because Magna needed a partner. I knew in Russia (going it) alone in those days was very difficult.
I started to talk to Oleg about a partnership. I said, “Oleg, you can have 40%, because Magna wants 60%.” Oleg said, “Yeah, that’s quite good, but it’s too complicated. I would like to participate in Magna on the top end (as a stakeholder); you do that job (running the joint venture).” (Laughs)
So we came together, and that’s my history with GAZ. That was the basis of my decision (to come here).
When (Deripaska) entered into (a partnership with) Magna, it was based on trust. Because in 2006, for a Russian to buy a stake in an American- (and) Canadian-listed company, I had all I could do to explain to my board colleagues why this is important. We made (the deal) based on trust, because we knew our money was in good hands here.
When Mr. Stronach decided to get out (retire), I said OK, I will go and help Oleg in Russia, because he had asked me a couple of times.
We came at the right time and the right spot. If you see the brightness of our people and how happy they are, that gives me the most positive signal that we did the right job.