On February 1st, 2018, Linamar Corporation–the international manufacturing conglomerate based in Guelph, Ontario, Canada–completed its purchase of MacDon Industries Ltd. The transfer of ownership marks another significant milestone in MacDon’s continued growth and expansion, an upward trajectory that began in 1949 when Tom and Bill Killbery started producing North America’s first self-propelled grain swather in a quonset building beside Winnipeg’s airport. To understand more about the acquisition and its significance for MacDon’s future, Performance Magazine sat down with MacDon President Gary Giesbrecht.
Performance: Your tenure with MacDon goes back to the 1970s. Back then, did you have any idea of the company MacDon would become?
Giesbrecht: Not really. When I joined in 1976 we were a company of about 300 employees selling our self-propelled windrower and some pull-type swathers to six or seven OEM customers. We just started to sell overseas to a couple of customers under the MacDon brand. Even though the company already had a track record of producing quality harvesting equipment, I don’t think anyone could have foreseen MacDon taking on the leadership role it has in harvesting today.
Performance: Was there anything about the MacDon you joined back then that you still see in the company today?
Giesbrecht: I recall being really struck by how passionate everyone was about the AG business. Joe MacDonald referred to it as MacDon’s “Three Ps of Excellence”– the people, the passion and the product–and he believed that all three were integral to the company’s success. It was sort of MacDon’s mantra back then. That philosophy of dedicated people, a passion to excel and leading-edge products remains the centre of our culture.
Performance: Let’s turn to the recent purchase by Linamar. We understand that MacDon had many suitors. What was it about Linamar that made it the right choice?
Giesbrecht: One of the things we drove for in our search for someone to acquire MacDon was a company that would respect the legacy left by the MacDonald and Killbery families. Equally important, there had to be an understanding of how a continuation of that legacy is integral to the brand’s success going forward. Linamar understood that. They shared that they have a lot of trust in the people at MacDon. Basically the message was, MacDon’s management team would continue to drive the company and employ the same approach and principles that made MacDon successful.
Beyond that, we were also looking for a company that shared similar values. Now anyone who has spent any time with MacDon knows how family oriented the company is, and that approach came directly from the leadership of Joe MacDonald and his sons. At MacDon family means respecting and looking out for one another–not just our employees, but our dealers, our suppliers and our customers as well. No one succeeds unless we all succeed. Well, one of the things that drew us to Linamar is that they are very much a family oriented company as well with similar values to MacDon’s. Linamar was started by Mr. Frank Hasenfratz, who began by machining parts in his basement. He then brought family members into the company, very much like MacDon. In fact, even though Linamar is a public company, the Hasenfratz family still maintains a strong leadership role within the company. Mr. Hasenfratz remains the Board’s chairman and his daughter Linda is the company’s CEO. The acquisition of MacDon by Linamar was one that just made sense.
Performance: How will the new relationship with Linamar affect business day to day at MacDon?
Giesbrecht: Nothing that our customers or dealers should see. With the sale of the company now behind us, there is now continued stability for the long-term. This will allow us to focus on more long-term product planning, investments, and growth strategy.
Performance: Are there any synergies between the two companies that MacDon can take advantage of?
Giesbrecht: That’s perhaps the most exciting aspect of the acquisition. With 60 manufacturing facilities worldwide, Linamar is a very large successful company and can draw on financial resources that will assist MacDon in its continued growth. Linamar also owns Skyjack, an OEM brand of aerial work platform equipment that services the industrial and construction industries. Skyjack's manufacturing processes and approach to doing business is quite similar to MacDon. Additionally, Linamar has a manufacturing presence in just about every major international market that we want to expand into, providing us with opportunities that were not there before. For example, Western Europe has been a challenging market for us to sell into because of the costs related to the shipping of assembled products, servicing equipment from North America, marketing conditions, and a few other issues. But that market now becomes much more viable thanks to Linamar’s significant business and manufacturing capabilities and experience in Europe.
Performance: Are there any other opportunities for both companies worth noting?
Giesbrecht: On our side we see some great opportunities for MacDon to take advantage of when you see Linamar’s capabilities with regards to their HR programs, Lean Manufacturing concepts, new technologies and their overall approach to markets around the world. They have told us that there are things that MacDon does extremely well that they can benefit from, such as our service parts, product support and new product development. There are some real synergies to be explored.
Performance: Is there anything else you would like to leave our readers with concerning Linamar’s acquisition?
Giesbrecht: I would just like to stress how hard we looked for the right fit for our employees, our dealers and our customers in searching for the best company to acquire MacDon. As we transition from the ownership and guidance of the MacDonald family, all of the things that helped make MacDon be the company it is today will remain in place. We will continue to invest heavily in R&D and take the risks necessary to develop the ground breaking technologies that pushed the company forward. Equally important, we will continue to employ people that take pride in delivering leading-edge quality products, and truly care about the farmers that rely on those products for their livelihoods. It just continues to be a great story.
Ownership: Public (TSX: LNR. TO)
CEO: Linda Hasenfratz
Headquarters: Guelph, Ontario, Canada
Employees: 28,600 (2017)
2016 Sales: $6.5 Billion CAD
Industries: precision parts and products for the automotive, commercial vehicle, off highway, marine & recreational, industrial, energy and agricultural industries
Manufacturing Capabilities: 60 facilities located in 17 countries