Management professionalization and move into the industrial automotive sector
Ronald Aldworth joined the Iochpe Group in November 1982, at the age of 35, on the invitation of the director, Ivoncy Ioschpe. It was a time when the company was attaining a whole new level of professionalization through its success in the financial sector, and it was planning new forays into industry. Ronald remembers that first conversation with Ivoncy:
“Ivoncy came straight out and said that he wanted to professionalize the Company so he could devote more time to his personal interests, to the arts…things he loved. Even so, he kept putting in 12 to 14-hour days. So, everything he’d said during that initial conversation never really materialized…And that turned out to be a good thing for the Company, having him so engaged and present”.
In the beginning, Ronald worked in Porto Alegre, analyzing the opportunity to buy an important local bank, Sul Brasileiro (the sale fell through). In mid-1983, now superintendent, he began structuring the company, centralizing decision-making and professionalizing the management, which helped the Iochpe Group to invest in the industrial sector and obtain good results, especially with the acquisition of Massey-Ferguson.
“It was a time when the Group was beginning to professionalize its industrial segment, as the banking business was already fully structured and prospering. I created a central administrative structure, which subsumed the company’s various areas and investments, such as the Bank, Edisa, Máquinas Ideal and some new concerns as well, such as the acquisition of Massey-Ferguson. This project evolved, and, towards the end of 83, we signed the purchase agreement and the sale went through in July the following year. The acquisition encompassed the whole tractor, harvester and diesel motor business, operating out of a factory in São Paulo.”
In the financial area, Ronald also took part in the Iochpe Group’s first steps in the insurance segment, with the acquisition of Comind Companhia de Seguros, in 1985. The insurance business was sold off by the Central Bank after the parent company, Banco Comind, went bust.
“At this stage, Iochpe had a full financial conglomerate, except for an insurance company. Iocphe had started in finance, then bought an investment bank, followed by a commercial bank, a leasing company, and a stock broker, but it still didn’t have an insurance company. We bought about a dozen of Comind’s bank charters and started opening agencies throughout Brazil: first in Campinas, then another in São Paulo, Caxias do Sul, Pelotas…and others besides”.
In order to promote a more agile brand of administration and foster the Iochpe Group’s values, Ronald moved to São Paulo, where the insurance company had its headquarters. In 1986, when the Cruzado Plan1 froze prices, the economic crisis the country was mired in worsened, and the Group’s financial wing as a whole had to adjust to the new situation.
“Iboty was in charge of the bank. He asked me to spend some time in São Paulo to keep an eye on our new acquisition. Our bank was more of a corporate outfit, so it had very few branches. I soon realized that Comind’s structure wasn’t suited to the new operations model we had in mind. In the weeks following the acquisition, which went very smoothly, we discovered that its operational structure, and the re-engineering it would require, posed a far greater challenge than we had anticipated. So Iboty asked me to extend my stay in São Paulo. I inquired for how long: two months? Six? And he just gave me that enigmatic look of his. So I said: You want me to move to São Paulo permanently, is that it? And he said: “Yeah, that sounds about right…”. So, I moved up to São Paulo and took charge of the insurance company. 1986 was a very difficult year—with the Cruzado Plan. It radically changed the role of insurance companies across the board, scuppering the whole logic of the changes we’d made. It had a massive impact on Banco Iochpe too, which had just opened more branches Brazil-wide.”
Focus on the industrial sector
In 1989, at Ivoncy’s request, Ronald became managing director of Massey Ferguson. He was involved in the whole process of setting up the new Inc. and the “Maxion”brand, as well as the incorporation of Máquinas Agrícolas Ideal into Maxion S.A. and the acquisition of FNV. At the same time, he worked on the sale of the financial operations to the Bankers Trust. With this, the company rolled out its strategy of focusing on the industrial sector, especially the automotive and railcar segments.
“I stayed with the insurance company from 1986 to 89. In 1985 the Company sold half of its stake to the Bankers Trust. Later on, in 89, it sold the rest of the bank, except for the commercial bank, which was small and remained small, practically inactive. That same year, Ivoncy came to me asking if I’d be interested in managing Massey Ferguson, and I took the post. We then changed the name to “Maxion”, incorporated Máquinas Ideal into it, and bought FNV”.
In the early 90s, Ronald was involved in the company’s corporate restructuring, which enabled it to go on growing under the pall of uncertainty generated by the Collor Plan2 and the stagnation of the national economy.
“All of the Group’s going concerns (Edisa, Riocell, Banco Icohpe…) transferred to Maxion, which ceased to be a holding and became an operational company in its own right. Foreign shareholders became interested in us. We started promoting our business abroad, in English, and this had an impact. 30% of our shareholders were foreign, so we had fantastic visibility. We were one of the best-known private Brazilian companies worldwide.”