Brazil: The Willys Way

At a bustling 32-acre plant outside the Brazilian town of Sao Bernardo do Campo last week, coveralled workmen proudly rolled a pair of shiny new compact cars off the assembly line. Hardly had they done so when William Max Pearce, 49, general manager of Willys-Overland do Brasil, announced his plans to send the two cars—the first production models of the new Aero-Willys 2600—to Paris for next month’s international auto exposition. Pearce and Willys had reason to be excited. The Aero-Willys is Brazilian from taillights to engine block—the first car to be completely designed, tooled, engineered and manufactured in Brazil.

Up from Jeeps. Only ten years old, Willys-Overland do Brasil is already Brazil’s largest private corporation, boasts 10,000 employees and last year accounted for nearly one-third of the 144.000 cars and trucks produced in Brazil. But in a country racked by nationalistic growing pains, it has an asset far more important than size. Most U.S.-backed companies in Brazil are wholly-owned subsidiaries, and their top executive ranks are closed to Brazilians. Willys is only 49% owned by the U.S.’s Kaiser Corp. The remaining 51% of its stock is held by 48,000 Brazilians and Managing Director Pearce answers to an operating committee of five Brazilians and four Americans. Result is that while other U.S. subsidiaries are plagued by expropriation threats and nagged by gringo-baiters, Willys booms unmolested. Last year its profits were $6,900,000 on sales of $104,800,000. “The government,” says an envious Yankee competitor, “wouldn’t dare attack Willys. It would have 48,000 angry people to answer to.”

Willys’ strength is due partly to the foresight of U.S. Industrialist Edgar Kaiser, who in 1954 took the then-daring decision to enter Brazil’s auto market on a partnership basis and personally guaranteed a $42 million Bank of America loan that provided Willys do Brasil’s working capital. But it is due as well to enthusiastic Brazilians who decided that they could switch successfully from assembling imported Jeep parts to actual manufacturing of cars. The odds were long. One visiting U.S. auto executive, after studying the shed where Jeeps were being assembled at a six-a-day clip and learning that Brazil had no parts suppliers, dismissed the manufacturing project with the blunt comment: “You’re nuts.”

“Let’s Join ‘Em.” With financial backing from Kaiser and technical guidance from onetime Utah Cowpuncher Pearce, the Brazil nuts went ahead anyway. U.S. engineers converted an old foundry to make Willys’ castings, began building the sprawling, efficient plant at Sao Bernardo. The Brazilians set about lining up parts suppliers. A manufacturer of hypodermic needles converted his production to gas and oil lines, and a blacksmith bid to supply wheels. Recalls Willys Treasurer Paulo Quartim Barbosa: “We gave him an order for 500 wheels. They weren’t quite square—but almost. Our technicians found they had eight protruding points. But we gave him another chance, and when he sent them back to us again two months later, they were as good as the wheels we had been importing.” Two years ago, when Willys decided to ‘produce the all-Brazilian 2600, it still had no designers. To do the job, the company tapped a 28-year-old architect, Roberto Araujo. Says Pearce: “This is his first major effort. I think it’s good.”

Now, with an assembly line turning out 6,000 cars a month, Pearce bustles with plans to step up his sales. Willys’ present 285 dealerships in Brazil will be doubled within two years; remote agencies will receive new cars by air. Willys also plans to establish 500 emergency repair shops around the country, train mechanics to man them, and-provide spare parts. Eventually Pearce hopes to export from Brazil to other Latin American nations. In time, Willys do Brasil and its American cousin may even meet head on in a battle for export markets. Edgar Kaiser already foresees the possibility. Says he: “When that comes up, we’ll just have to be competitive. We face competition when these countries industrialize, no matter whether we help them or not. So I say, ‘Let’s join ’em.’ “