What happens to the American division of a European manufacturer which is having financial problems? Usually a customer and dealer satisfaction death spiral, and the slow destruction of the brand.
How about if we throw in a 12 month factory shutdown, ending in an asset sale? Closing offices, locking doors, and a brand that is unrecoverable.
And then there’s Fagor USA, the American branch of the Spanish appliance juggernaut. As an early winner in the Spanish real estate bubble, Fagor was also destroyed when the bubble burst. During its 12 month “reorganization”, Fagor’s factories were shuttered.
And yet Fagor USA soldiered on.
Seeing the coming shutdown, it organized large pre-shutdown inventory purchases for itself and its distributors. Insulated financially by a corporate structure independent of Fagor Spain it was free to add suppliers and acquire inventory from outside the Fagor network. At the same time, their healthy small appliance business remained unaffected by the closure because Fagor USA could make direct purchases to Fagor Spain’s supplier network.
Fagor USA was able to continue its North American business because of planning, diversification, and the luck of its corporate structure.
With CATA’s recent asset and brand acquisition of most of Fagor’s factories, production is ramping up, and the folks from Fagor USA can finally go home, take a shower and get some sleep.
Someone buy these guys a beer.