Linda's Linamar

She may be her father’s successor, but she earned her shop-floor cred, proving she’s the one for the job. As CEO she set big goals and turned a successful SME into a global player.

It's late on a Friday afternoon in March and Linda Hasenfratz is coming off a whirlwind week. Linamar Corp. has released its 2014 results and they are praiseworthy. Year-over-year sales have climbed 16% to a record $4.2 billion and earnings are up 40% to a record $320.6 million. The CEO wonders, then, why the company’s stock has taken a little hit.

"I haven’t had time to study all the analysts’ reports yet," says Hasenfratz, settling into a chair at the company’s headquarters in Guelph, Ont. "But I did see one that suggested he was expecting our growth to taper, which confused me because we specifically talked about the fact that we would see double-digit top- and bottom-line growth again this year. And we talked about booked business a few years out, which pretty much nails down double-digit growth for the next few years."

She is puzzled, but not particularly upset, taking the market’s unpredictability in stride. "Who knows?" she says with a shrug and a laugh that comes naturally. "The market? You never know." She figures the stock will bounce back, and it did.

Hasenfratz, 49, one of the top executives in the North American auto parts world, hasn’t gotten where she is by fretting unduly about what she can’t control, be it the stock market, the near collapse of major customers or the challenges of being a high-profile woman in what can still be called a man’s world. She moves ahead, making the best decisions she can with the facts at hand, celebrating victories and learning from mistakes — an executive at the top of her game.

She’s definitely a "go-forward person," confirms Linamar’s president and chief operating officer, Jim Jarrell, who joined the company in 1991. "But I would say that she uses what she has learned in the past to go forward."

That’s key advice she got from her most important mentor: her father, Frank Hasenfratz. Now chairman, the elder Hasenfratz started Linamar in 1966, naming the company after her, her sister, Nancy, and their mother, Margaret. Linda joined the company in 1990 with a bachelor’s degree in chemistry from Western University and a year under her belt working in the pharmaceutical business, a path she says she chose to "prove to myself that I could make it on my own, that I didn’t need my father to give me a job to be successful." She started at Linamar as a machine operator to earn her shop-floor cred and worked her way through the ranks to become CEO in 2002.

"That training was critical because it taught me the basics of our business — what it’s like to be a machine operator on the shop floor, how it feels to be on your feet all day in a hot environment — and that gives you respect and appreciation for that job."

Sales have tripled since she became CEO. The company now employs more than 19,500 people and has 48 plants in eight countries — Canada, the US, Mexico, France, Germany, Hungary, China and a new one in India. It has more than 50 customers worldwide and its driveline, engine and transmission components can be found in hundreds of millions of vehicles throughout the world.

Linamar has thrived in a tough market by achieving continuous improvement in both processes and products, she explains. "We are big believers that the combination of innovation and efficiency is how to stay competitive."

Manufacturing standard products for transmissions and engines, such as gears, clutch modules, cylinder blocks and connecting rods, involves minimal design, so success is a matter of improving quality while relentlessly finding ways to cut costs. The driveline side, where the company is more system-focused, has provided opportunity for innovation, and Linamar has seized it. It has designed power units, rear drive modules and highly engineered gears that are lighter weight, making vehicles more fuel efficient, a key selling point in today’s energy-conscious world. Linamar has also developed a sophisticated electronically actuated axle that allows vehicles to switch into hybrid mode.

While focusing on improving core products, Hasenfratz has also pursued a strategic diversification strategy. The year she became CEO, the company purchased Skyjack, which makes self-propelled scissor lifts for industrial use, and provides a steady income stream that helps offset the volatility in the auto sector. Linamar has also branched out into agricultural products for harvesting corn and grain and into the alternative power market with components for wind generation equipment. She is aiming for an eventual sales target of $10 billion overall.

The company’s growth is all the more remarkable considering the financial meltdown of 2008 and the near collapse of General Motors and Chrysler, two of its biggest customers, in 2009. Hasenfratz earned accolades for steering the company through the crisis, and says the most important thing she did was communicate with stakeholders honestly and often, being forthright about the ramifications of lost business while offering assurances that the company would survive.

What about the lessons from the past that helped her learn along the way? "There were some joint ventures that we did that I regret," she says, declining to name names. "We learned to spend more time evaluating strategic positions. Operationally, we make decisions very, very fast … but when it comes to more strategic decisions that have longer-term consequences, you should spend an appropriate amount of time and effort assessing those decisions."

Through it all, Hasenfratz has been determined to keep Linamar’s entrepreneurial spirit alive, a goal she admits isn’t easy in a sprawling, $4.2-billion enterprise that requires procedure manuals and company policies to function.

"That to me is a constant battle," she says. "There seems to be no shortage of people who want you to put in more procedures and more rules and more reporting, and it just weighs you down." Her battle plan includes keeping operating units as small as possible, letting people take ownership of their roles and then holding them accountable.

Jarrell says his boss is adept at interpersonal relationships and describes her management style as cooperative. "Linda is very good from a strategy perspective," he says. "Then she lets you do your thing. She doesn’t micromanage."

For her entrepreneurial leadership in fostering global growth, Hasenfratz was named 2014’s EY Entrepreneur of the Year for Canada and competed for the world title in Monte Carlo in June.

"She’s really focused on trying to be that game changer, that innovator," says Colleen McMorrow, who heads the EY program. "She has that big, bold vision and can-do attitude. And she’s certainly got the entrepreneurial gene," McMorrow adds, referring to the fact that her father went from being a penniless Hungarian refugee to a billionaire by starting out with a lathe in his basement. "And it was not lost on the judges that Linda is a transformational and entrepreneurial CEO in an industry that is certainly not dominated by women."

Being a highly visible role model is a responsibility Hasenfratz embraces. Today, for instance, as the market was digesting the company’s financial results, she made time to attend an event at the Perimeter Institute for Theoretical Physics in Waterloo, Ont., which addressed the issue of women in science and engineering. But she makes it clear she doesn’t like the glass-half-empty approach that tends to dominate media coverage of the issue. "We should be happy that we’re making progress," she says, citing a statistic that says women now comprise around 20% of the enrolment in university engineering programs. "It’s not 50%, which is the goal, but it’s almost halfway to the goal. And we’re making tremendous progress if you look back to just 20 years ago."

Did she ever face sexism on her way up at Linamar? "I don’t think so," she says. "But I have to say that throughout my career I’ve chosen not to dial in to that frequency. I can’t control what somebody thinks."

Instead, as she took on key roles in different departments, she focused on the job at hand. "When you do that everybody forgets pretty quickly about their preconceptions around male/female, or that I was younger maybe than I should have been and that I was my dad’s daughter. There were probably all kinds of things that people were thinking, but I didn’t really care. I just did my job."

Since 2003, Hasenfratz has been on the advisory board of Catalyst Canada, a nonprofit research and advocacy group for women in business. Despite the demands of her job, she actively mentors other women and steps up when she’s called on to further the goal of preparing more women for the C-suite.

"Because of who she is, she’s asked time and time again to provide advice, to be part of something, to launch something," says Alex Johnston, Catalyst Canada’s executive director. "Linda pops up all over in the world that I operate in. It is something that she’s integrated into her day-to-day.

"She is very generous with her time with people and a real champion of others, both as a role model and directly helping to develop the pipeline of talent both in and out of Linamar," Johnston adds. "She always makes the time. It would not cross her mind not to be central to that conversation because she understands the importance of it."

While she’s busy growing Linamar and being a role model, Hasenfratz also knows the importance of making time for family and leisure activities.

"I like to cook very much, so we entertain a lot and have friends over for dinner," Hasenfratz says. "I’m fairly active, so I’ll run or do some other type of activity every day. I really enjoy that."

She relaxes by travelling, skiing and cottaging with her husband, Ed Newton, who runs a general contracting business, and her children, Olivia, Tommy, Emily and Katie, ages 14 to 19. The family spends Christmas in New Zealand with Newton’s family, staying in a coastal home he built for them as a retreat.

Frank Hasenfratz remembers his daughter coming to him in the late 1990s when she was studying for her MBA at Western. At the time, she was also running two Linamar plants, working at head office and wanting to start a family. When she asked him what she should postpone, the answer he gave was, "Absolutely nothing."

So Linda decided not to follow the advice of a professor who had counselled her to postpone starting a family until the degree was done.

"She had two children while she was taking her MBA," the senior Hasenfratz recalls, a note of pride in his voice. "We as human beings are capable of doing a lot more than we think we are."

One of the happiest days in his life was when his daughter decided to join the company. His only reservation — that she might not stick with it — vanished long ago.

Was he surprised by her success?

"I’m surprised today," he says. "The truth is I could not have brought the company to where it is today." He cites his daughter’s push to expand internationally, her financial acumen, formal education and "personality plus" as things that helped Linamar grow beyond where he believes he would have been able to take it.

"People still give me the credit quite often, but it’s not me. Linamar is under Linda’s direction and her management."

It’s all about her now.

 

About the Author

Susan Smith


Susan Smith is a freelance writer in Toronto.

comments powered by Disqus

Highlights

Update your knowledge and strengthen your network at this must-attend conference covering the most important issues and trends affecting audit committee members.

It’s probable that someone you know is deep in debt. If you are observant, you might see one of these seven signs.