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It's no longer big. And it has no more claim on easy. But ground zero of America's worst natural disaster still has a night life. "A good time is always available in Nawlins--before, during and after hurricanes," says Richard Muller, a local bank president. "Unfortunately, the Fairmont is closed, so you'll have to find someplace else to eat."
He's not kidding. Over the holidays, Muller and other born-and-bred establishment types from sleepy Mandeville, an affluent community that rests north of New Orleans across Lake Pontchartrain, got together for a night out in the weather-stripped French Quarter, just like they do every year. The group (which included a Louisiana Senate hopeful) isn't alone, although their white stretch limo was almost lost in the sea of mucky contractor trucks that now flood the city's infamous adult playground.
Bourbon Street bars and gentlemen's clubs are thriving--thanks to recovery dollars. Even the trinket shops are open (offering T-shirts that say nasty things about girls named Katrina and Rita). But don't let the bustle fool you: law has returned to the city; social order hasn't. "Ignore the temp workers," Muller sighs, "and look around. We've lost the working class."
In the ghost 'hoods of New Orleans, the traffic lights don't work. You must, however, frequently stop on streets blocked with rubble, overturned cars and boats. And that's when you really notice the homes, many of which still stand, albeit devastated and deserted. The absence of people creates a movie-set feel--think Mad Max or Escape from New York. But the destruction is real, and the numbers are staggering. Hurricane Katrina killed more than 1,000 people, most of them old, ill or disabled, who had lived in the poorest parts of the city. Their neighbours, the thousands of lucky ones, lost their homes, possessions and means of subsistence. As waters were rising on Aug. 29 last year, many of the city's residents were left to fend for themselves. Some were abandoned by health-care workers; at least one of them reports being ditched by nuns--adding faith in humanity to the list of items lost.
Enter Frank Stronach, founder and chairman of the US$20-billion-plus Magna International Inc. auto-parts empire. In Katrina's wake, he deployed his unique corporate powers to whisk hundreds of storm victims to safety while Federal Emergency Management Agency officials were still untangling red tape. He then made a five-year commitment to help his chosen people rebuild their lives.
The Times-Picayune in New Orleans credits Aurora, Ont.-based Magna's chairman with being the individual who has done the most to shore up poor America's leaking trust in capitalist society. The paper's editorial pages insist his generosity "shames us."
Investors might not share that assessment. After all, Stronach is spending their money, not his. And they've been down that road before.
Frank Stronach caught the hurricane news on CNN in California. He watched slack-jawed as the soul was kicked out of Louisiana's boot tip. Then the levee broke. He could have waited for the public sector to act. But that's not his style. The Austrian-born tycoon came to Canada with just $200 and some tool-and-die experience. He started his empire in a Toronto garage, and Stronach says he remembers what it was like to be alone and hungry--enough to imagine the taste of despair on New Orleans' swamped streets. So he did what only someone like Frank Stronach would do--he picked up a phone and commanded an immediate private-sector rescue mission.
On the other end of the line was former Liberal MP Dennis Mills, a one-time Magna executive who returned to Stronach's inner circle as vice-chairman of Magna Entertainment Corp. after being tossed from public office by New Democrat leader Jack Layton in 2004. When Stronach called, Mills was cottaging in Ontario. But knowing Stronach has a force of will that matches Mother Nature, he didn't question his orders. He simply gathered a team of Magna empire employees and headed south, where Red Cross and FEMA officials were somehow convinced to release evacuees into Stronach's care.
About 280 battered storm victims, who lost a heck of a lot more than their favourite restaurant, ended up in dorm rooms at a posh MEC horse-racing facility near Florida's Palm Springs. While FEMA was still trying to get its act together, Stronach's guests were being showered with aid and designer clothes. And before the Magna rescue team caught its breath, Stronach ordered his companies to help relocate the displaced storm victims to a new Louisiana community--built from scratch. He also challenged other business leaders to join the "Canadaville" cause by donating funds or services. More than 50 project partners, ranging from Air Canada and Indigo Books to IBM and Sharp Electronics, stepped up to the plate.
"This is a simple case of neighbours helping neighbours," says Mills. "It's also Stronach's finest hour."
Stephen Jarislowsky, co-founder of the Canadian Coalition for Good Governance, doesn't see it quite that way. "Stronach thinks he's king of the castle," Jarislowsky says. "He doesn't give a shit about what anybody else thinks." Granted, the CEO of Montreal-based investment firm Jarislowsky Fraser Ltd. concedes that he'd rather see Magna companies dump money on Louisiana's disaster zone than into Stronach's pocket. Then again, Jarislowsky thinks investors are capable of deciding when and where to give away their money to charity. In general, he sees nothing noble in Stronach's controversial use of multiple-voting stock to control companies in which the chairman owns relatively few common shares. He even thinks the way Stronach uses his power is inconsistent. "Nothing fits the Stronach philosophy," Jarislowsky says.
But Stronach isn't really a hard nut to crack, at least as far as his auto-parts conglomerate is concerned. He thinks regulators and institutional investors should stay out of the boardroom. Executives should be required to focus on profits, and companies should have constitutions that predetermine how earnings are distributed to research, management, employees, shareholders and society. How revenue is generated should be left up to the entrepreneurs, who should be pretty much free to play calculated hunches and spend resources how they see fit, as long as they stay within the constitutional limits. That's how Magna is run, and why Stronach says he didn't have to hold a board meeting "when people were drowning."
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