Iochpe-Maxion and the industrial agriculture segment

A watershed in the Iochpe Group’s decision to focus its operations in industry was the acquisition of Massey Ferguson Perkins, in the 1980s.   

Operating in Brazil since 1937, the Canadian company Massey licensed  representatives in numerous Brazilian cities. Its first combine harvesters, imported from the main plant in Canada, introduced the mechanized harvest to Brazil’s vast fields.  

The Iochpe Group had been working with Massey since 1956, when Salomão Ioschpe became a licensed reseller of the company’s tractors in Porto Alegre. The dealership was called Auto-Agrícola, and made a key contribution to the development of agriculture in the Brazilian South in the 50s and 60s.    

Massey’s output grew vigorously into the mid 70s. In 1976, production reached a record 30,478 units (1,716 of these being harvesters), 49% of the national total. However, with the depression that assailed Brazil after the end of the so-called “economic miracle”, agricultural output shrank and investment dried up. As a result, Massey’s production plummeted to only 9,241 units in 1983, a 70% drop on six years earlier.  

Amid this wholesale crisis, the Canadian group decided to pare back its operations in Brazil by merging with Motores Perkins, another leading agricultural machinery manufacturer on the domestic market. The result was Massey Ferguson Perkins do Brasil S.A. Finally nationalized, it could now apply for investment funding from Brazilian development banks, especially the BNDES.  

Iochpe Investment Bank, part of the Iochpe Group’s finances business, was initially hired to analyze Massey’s situation and propose possible solutions. The Iochpe Board saw in Massey an enormous opportunity to diversify the Group’s activities, sealing once and for all the swing toward the industrial segment begun in 1978 with the acquisition of Indústria de Máquinas Agrícolas Ideal (with a plant in Santa Rosa, Rio Grande do Sul). Following this new strategy, the Group bought a majority stake in Massey in 1983 (57.3% of its capital), and changed the name to Massey Perkins a year later.    

It took only a year for results to rebound. Despite the 1980s being considered by many economists a “lost decade”, the Iochpe Group gradually managed to nurse the company back to financial health. In 1989, Iochpe assumed full capital control of Massey Perkins, inaugurating a new chapter in the Group’s history, with the creation of Maxion, a synonym of modernity and reliability in the autoparts and railcar sectors.