“I joined the company as an intern in June 1973, and was taken on full-time in December that same year, as an autoparts tool engineer. Back then, the company was still FNV- Fábrica Nacional de Vagões SA, which changed hands twice over its 80-year existence. The first takeover was in 1984, when it was acquired by Engesa, and the second came in 1990, when Iochpe-Maxion became majority shareholder.
Iochpe brought greater dynamism to the structure, with a sharper business vision and more modern management model.
When Iochpe took over, FNV was subdivided into three “Business Units”:
1) Maxion Highway Implements Ltd. , better known as “trailers”—this was a continuity of the FNV-Fruehauf line;
2) Maxion Structural Components Ltd, responsible for the manufacture and sale of autoparts (side rails, stamped parts, assembled chassis and wheels for commercial vehicles)
3) Maxion Foundry and Railway Equipment Ltd., which, in addition to castings and wheels for railcars, produced cast components for earthwork and mining machinery.
In 1996 I took over as head of Maxion Foundry and Railway Equipment and, in 2000, we orchestrated a joint venture between Iochpe Maxion and Amsted Industries, the world’s largest supplier of railway components. At the time, the Cruzeiro Foundry was licensed to produce Amsted castings and railcar wheels, and the joint venture was called Amsted Maxion Foundry and Railway Equipment.
It’s important to remember that the railway market was stagnant at the time, so there were no orders coming in, which meant that practically all the other railcar companies closed down. Crucially, despite the order drought, Iochpe’s management took the strategic decision not to abandon the business and kept an engineering team doing R&D in railcar and railcar component technologies and production processes.
After the 1996-98 concessioning of state-owned railways, the period 2001 to 2007 saw a boom in iron ore and grain exports (especially soya) buoyed by expressive Chinese growth. In order to be competitive, the best logistics for shifting these commodities involved not only ports, but railroads to and from them.
The biggest railway concessions were Vale do Rio Doce (Vale), which exported iron ore along the Carajás and Vitória-Minas railroads; MRS, which transported iron-ore from Minas Gerais to the port of Santos and nearby CSN; ALL, which moved grain alone the southern railways to the ports of Santos and Paranaguá; and the recently-created Ferronorte, which also ran soya up to Santos.
All at once, these operators needed larger freight railcars and higher productivity in load/offloading, in other words, technological innovations. Here at Iochpe, the decision to invest in technology during the slump really paid off when the market came back to life. Between 2001 and 2007, we received expressive orders for railcars, producing up to 7,000 units in peak years, with 90% market share.
These were highly challenging years for Amsted Maxion, which, with shareholder support, managed to fill all its orders and keep the Brazilian market supplied with railcars and railcar components.
Iochpe Maxion always had growth in its DNA, and, in 2008, after some years focused entirely on the organic growth of its autoparts business at the Amsted plants and the facilities in Cruzeiro and Contagem, the decision was taken to boost that organic growth with some strategic acquisitions.
This decision coincided with my transfer to the offices in São Paulo, where I joined the group in charge of prospecting M&A targets.
In 2009, the opportunity arose to buy Fumagalli, Iochpe’s first acquisition in a long time.
Fumagalli was a division of ArvinMeritor Brasil, and it produced steel autoparts out of its factories in Limeira (São Paulo) and São Luis de Potosí, in Mexico.
As the Cruzeiro plant was already producing steel wheels for trucks, busses and farm machinery, with the acquisition of Fumagalli, Iochpe now had a foothold in every segment of the steel wheels industry. However, it was still limited geographically to the NAFTA and Mercosur markets, and had yet to move into producing aluminum wheels for its global clients.
In 2010, a new opportunity arose in the form of the Argentinean side rail manufacturer Montich, with which we formed a 50/50 joint venture, Maxion-Montich SA, specializing in side rails, stamped parts and chassis for trucks, busses and pickups.
In early 2011, fresh negotiations got underway for the acquisition of two further companies: 1) Hayes Lemmerz International, the traditional global manufacturer of steel and aluminum wheels for passenger vehicles and steel wheels for commercial vehicles. Hayes Lemmerz added 17 new production units across 11 countries. And, b) Inmagusa, from the Mexican Galaz Group, a major manufacturer of side rails for trucks and busses for the NAFTA market (Mexico, USA and Canada). Both operations went through in early 2012.
After these takeovers, the company was restructured into two main business units; Maxion Wheels and Maxion Structural Components, as well as the JV Amsted-Maxion.
This was Iochpe-Maxion’s ambitious growth strategy, which, in just four years, saw the group grow from a local manufacturer to a major multinational and one of the leading global players in the autoparts market, operating in the automotive wheels and structural components segments.
There are various other opportunities for growth out there, both organic and through M&As, and with growth in its DNA, Iochpe-Maxion will certainly be seizing these opportunities in the years to come.”