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COMPONENTA A Company with Nine Lives
Contents
1918 The Iron and MeTal Foundry SuoMI IS eSTablIShed
1920 sSTock MarkeTS craSh, Foundry ThrIveS
1939–1943ProducTS oF The Foundry are needed In war and Peace
1948–1963 develoPMenT oF own ProducTS
The 1970 s and 1980 snew ManageMenT, and bIg decISIonS
The late 1980 sSanTaSalo In The STock exchange, and The coMPany SPlITS In Two
1991–1993receSSIon In FInland, a whIrlwInd In The coMPany
1993–2003The new MIllennIuM arrIveS, and Today’S coMPonenTa IS born
2003–2008new dIrecTIonS – The neTherlandS and Turkey
COMPONENTA A Company with Nine Lives
Contents
1918 The Iron and MeTal Foundry SuoMI IS eSTablIShed
1920 sSTock MarkeTS craSh, Foundry ThrIveS
1939–1943ProducTS oF The Foundry are needed In war and Peace
1948–1963 develoPMenT oF own ProducTS
The 1970 s and 1980 snew ManageMenT, and bIg decISIonS
The late 1980 sSanTaSalo In The STock exchange, and The coMPany SPlITS In Two
1991–1993receSSIon In FInland, a whIrlwInd In The coMPany
1993–2003The new MIllennIuM arrIveS, and Today’S coMPonenTa IS born
2003–2008new dIrecTIonS – The neTherlandS and Turkey
cas t i ron component for heavy t ruck indus try.
cas t i ron component for heavy t ruck indus try.
In November 2008 it has been 90 years since foreman Matti Lehtonen
started foundry business in Helsinki, Finland. Over the years, through
organic growth and acquisitions, the company has grown from small Finnish
foundry into international Group. Today, Componenta is the second largest
independent cast component supplier in Europe.
The Group has production facilities in addition to Finland in Turkey,
the Netherlands and Sweden, and some 5,000 employees.
Already in the beginning the owner of Rauta- ja Metallivalimo Suomi
(Iron and Metal Foundry Finland) stated that the main factors creating
success will be high quality, competitive prices and quick deliveries.
In addition to these, the key factor was good customer service, based on
understanding and fulfilling the customers’ needs. These issues still form
the basis of Componenta’s competitiveness.
A lot has happened in the history of Componenta. During the decades
the family company has gone through good and bad times, wars and
recession, each of its had had its effect in the company’s operations.
Flexibility, quick decision making and adjustment have often been needed
in the ever changing environment.
Componenta’s story as written by Harri and Selim Saukkomaa begins in
1918 and ends in the autumn of 2008. Pictures of the company’s operations
and products are used to illustrate the story.
Foreword
2 componenta
chass i s for t i l e mach ine cas t for lokomo, we igh ing 2 ,840 k i logr ams .
a company with nine l ive s 3
Before going into what took place at the law
offices of Arthur Söderholm on 4 November 1918,
it is a good idea to look back nine years to 1908.
Matti Lehtonen, the co-founder of what
was to be the Iron and Metal Foundry Suomi
(Rauta- ja Metallivalimo Suomi – RMS), had set
up his first company. However, that company
did not last more than three years in the intense
competition that predominated the iron industry
in the first years of the 20th century, but this
did not discourage the diligent young man from
Tammela.
When he established the Suomi Foundry,
Matti Lehtonen was already 50 years old. The
other founder, businessman Viktor Tolska, had
bought an iron and metal foundry from a com-
pany called Santasaaren Tehtaat earlier in 1918
for 40,000 Finnish marks. Later Lehtonen bought
out Tolska’s share for 20,000 marks.
The collapse of Russia brought uncertainty.
Before 1917, Finnish foundries could make
significant profits from deliveries to from the
Russian munitions and shipbuilding industries,
and from repair work, but these times were
already in the past.
In the first year, the new company mainly
got orders for fairly small parts for ships. These
accounted for 40 percent of total invoicing for
1918. A total of 40 tons of cast iron objects were
produced by the Suomi Foundry in 1918. In the
following year the figure was nearly 96 tons.
The most important customers at that
time were the construction office of the City
of Helsinki, the Verkkosaari sawmill, the Ahjo
machine factory, as well as Hankkija and Elanto.
The Hakaniemi machine shop and the Arabia
ceramics factory became clients in the following
year. Decisions on the acquisitions of most of
these companies were the responsibility of
the same men who had been trained by Matti
Lehtonen, or with whom he had worked at the
Hietalahti shipyard.
cas t i ron component for heavy t ruck indus try.
1918The Iron and Metal Foundry Suomi is established
founder of the company mat t i l ehtonen, man -ag ing d ir ector 1 91 8–1 939.
4 componenta
in 1921 the foundry moved from Flemingin-
katu 34 to Kristiinankatu (today, Kirstinkatu) 8,
and Matti Lehtonen implemented a massive re-
furbishment. Finally, on 29 March 1922, the whole
foundry was placed under the name of Matti
Lehtonen. The price was 150,000 Finnish marks.
There were certain conditions that were set for
the deal, but Lehtonen was pleased. He finally had
a foundry of his own. At the time he took his son,
B. M. Lehtonen, to work as the managing clerk,
and to deal with various office matters.
The working hours and other regulations were
straightforward. The working day began at seven
in the morning, and ended at four in the after-
noon. The lunch hour was form 11 to 12. The work-
ers were expected to be on the premises at the
beginning of the work shift, in their work clothes.
Leaving the post was not permitted before the
end of the work day or the before the beginning
of a break.
In the early 1920s, the industry had started to
take wind, and a boom in the sector was starting.
Matti Lehtonen’s company benefited from this as
well. Agricultural output was also growing stead-
ily in Finland.
By early 1924, the foundry had established
good momentum, and had a foothold on the
Finnish market. However, in that year, a fire
broke out at Kristiinankatu 8. All of the foun-
dry’s activities were put on hold for a week.
The 1920s was a good decade for by and large,
as it was a time of increasing mechanisation in
Finland. However, at the end of the decade, the
global economy took a downturn. First, in 1928
a poor crop was a setback for Finnish agriculture,
and in October 1929, Black Thursday occurred on
the New York Stock Exchange, which brought on
the Great Depression.
As the 1920s had been primarily profitable
for the foundry, Matti Lehtonen decided to rent
a property from the city for a new building, on
Elimäenkatu in Vallila. The new building had
6,000 cubic metres of space. The depression was
felt in the order books, but with the help of a
loan, and the resources accumulated in the 1920s,
Suomi Foundry did better in the period than
most Finnish companies.
In the autumn of 1931 it seemed that the
worst of the turbulence might have been over,
and that the economy would start improving.
Even the Finnish mark was taken off the gold
standard, following the lead of the British pound.
The home market went into recovery.
From 1932 to 1937, the number of people
employed in Finland grew by 80 percent. Finally,
thanks to the upturn that followed the depres-
sion, Matti Lehtonen was able to buy the land
that the foundry was built on, which had previ-
ously been leased, as well as the property next
1920 s Stock markets crash, foundry thrives
cas t i ron component for mach ine bu i ld ing indus try.
a company with nine l ive s 5
door. The foundry building was expanded to the
new property already in the same year. Matti
Lehtonen actually went into retirement once in
the early 1930s, but he found it so boring that he
asked his son for a job as foreman at the foundry.
He got the job.
In the late 1930s, the foundry was in full
swing. Spare parts for threshing machines and
for machines used in rubber manufacture sold
at an incredible rate. The number of employees
began to get close to 100, and there were even
about ten women who were employed there. In
1938, the foundry’s turnover was nearly 7 million
marks. Whereas 100 tons of goods were produced
in 1919, this had risen to more than 1,500 tons.
Industrialist Matti Lehtonen died at the age
of 70 on 28 January 1939. The foundry itself,
its assets and its liabilities, were passed on to
his only son, B. M. Lehtonen. All the rest of the
property went to the widow, Amanda Lehtonen.
1939–1943Products of the foundry are needed in war and peace
on 30 novemBer, 1939, war broke out with the
Soviet Union. The Second World War had been
raging elsewhere since September. The year 1939
had still been better than ever. Output reached
1,662 tons, and more foreign iron was imported
than ever before – 750 tons. When the Winter
War broke out, the foundry quickly began to
manufacture cast-iron stoves and aluminium
horse collars. The raw material for the stoves
came from scrap iron, for which public collection
drives were organised, and the horse collars were
made from the aluminium frames of planes that
had been short down.
B. M. Lehtonen, the manager of the foundry
at the time, was a patriotic man. It was at his in-
sistence, that war materiel production was given mould ing of whee l .
cas t i ron component for mach ine bu i ld ing indus try.
6 componenta
a higher priority than civilian production.
The main products were hand grenades, as
well as landmines. B. M. Lehtonen also personally
took part in the development of the legendary
Suomi hand grenade. B. M. Lehtonen was proud
to have been able to take part in this way in the
fight for his country. He charged the lowest pos-
sible price for all of the goods that went to the
Defence Forces. He even managed to set up his
own Civil Guard unit at the foundry, which held
exercises on the upper floor so that the sound of
boots marching could be heard downstairs.
Toward the end of the war, a new challenge
faced the foundry. The Defence Forces needed
cylinders for the Ford V8 engines of its vehicles.
No more spare parts were available from the
United States, and the Finnish army’s vehicles
were in danger of irreparably breaking down in
the middle of a war. However, Finland did not
have the moulds needed to cast Ford cylinders.
Kalle Kuulas, head foreman of the factory at the
time, travelled through Sweden to Germany
under difficult conditions to find moulds for
casting cylinders at the Ford factory. The latest
moulds were not available, but the technical
manager of the Ford factory remembered that
he had seen the old moulds gathering dust in
a storeroom. They were found, and they were
delivered to Finland. A few hundred cylinders
were cast before the war ended.
Finland and the Soviet Union signed an
interim peace agreement on 19 September 1944.
The Prime Minister at the time, J. K. Paasikivi,
wrote in his diary, »A terrible treaty«. The
Continuation War, which had gone on for more
than three years, was finally over. Finland had
achieved a defensive victory, which secured the
country’s independence.
At the Teheran Conference in 1943, the Soviet
Union persuaded the United States and Great
Britain to agree to its demand that Finland pay
war reparations. So after all of the human suffer-
ing, the Soviet Union submitted a massive bill
to Finland. It was calculated that at least 343,636
train cars full of goods would be needed to pay
the reparations. Under the conditions that were
set, the reparations were to be paid by the end of
1950, although it was ultimately extended to the
year 1952. The estimated value of the war repara-
tions was 300 million US dollars.
It was quite unexpected that the list of goods
to be included in the reparations contained
far more metal industry products than wood
industry products, which Finland would have
been able to produce in large quantities. Suomi
Foundry was one of the biggest suppliers of the
engineering industry in producing war repara-
tion goods. The list of goods to be included in the
foundry’s output included »about 65,000 temper-
ed cast-iron wheels, or so-called Griffin wheels«.
The timetables were tight and the pressure
became unbearable. Production of the wheels
was difficult because the foundry lacked earlier
experience in the manufacture of Griffin wheels,
and nearly all of the wheels fell apart. The
foundry was familiar with producing traditional
bridge crane wheels, which were much easier to
manufacture than Griffin wheels. B. M. Lehtonen
tried to describe the difficulties in the produc-
tion of the wheels to the managers of Soteva, the
body set up to administer the delivery of the war
reparations. Soteva put pressure on Lehtonen,
appealing to his »love of country« to persuade
him to keep trying. After all of the trouble,
Soteva did not want to hand over the work to
anyone else, although the Rosenlew engineering
company in Pori was ready to give it a try.
Finally, the problem with the Griffin wheels
was solved through an educational visit to the
United States, and a loan from the Bank of
Finland. Production started off, and output for
1948 set a record for the foundry, which was not
broken until well into the 1980s. Six thousand
tons of castings were made.
a company with nine l ive s 7
check ing of the whee l cas ts .
k al l e järv inen and valde forsb lom »pump« large cas t ing.
8 componenta
j y lhä d i sc fr ames , we igh ing se ven tons , were cas t a lot in he l s ink i and la t er in the i i sa lm i foundry.
f e t t l ing shop in the 1 940s .
a company with nine l ive s 9
the money taps that were opened by the
Griffin wheels were closed again in June 1948
when the value of war reparations deliveries was
reduced by 50 percent, and some goods were
dropped from the list altogether – the Griffin
wheels included. This »great act of forgiveness«
was good for Finland, but for the foundry, it was
a disaster. Much had been staked on the produc-
tion of war reparation goods and, the construc-
tion of a new foundry building in Helsiwnki, for
instance, had to be postponed.
At the foundry it was noted that relying
exclusively on orders was precarious. The foun-
dry needed to get some of its own products into
its selection to compensate for times when there
were few orders. The first of these products were
moulds for pressure pipes, which the foundry had
manufactured on a subcontracting basis already
since the 1920s for the Helsinki City Waterworks.
When B. M. Lehtonen’s son Yrjö M. Lehtonen
was named the company’s technical and com-
mercial director in the 1960s, he quickly began to
push through innovations.
Suomi Foundry was now producing two
thirds of its turnover through its own products.
Custom-made castings were made for demanding
customers. These jobs kept the foundry’s techni-
cal know-how at the highest level. The customers
included for example Wärtsilä and Fiskars. Yrjö
M. Lehtonen was also good at establishing new
customer relationships, as he often directly ap-
proached the middle management of companies
and their expert decision-makers.
At the beginning of 1963, casting operations
moved to a new location on Teollisuuskatu.
The basic frame of the building had been built
already in 1948, but the end of war reparation
deliveries postponed the move to the premises.
The 1960s were a time of change and modernisa-
tion. A devaluation of the Finnish mark opened
export markets. The foundry began to export
heavily to Sweden and Norway.
cas t i ron components for mach ine bu i ld ing indus try.
1948–1963 Development of own products
10 componenta
which was equivalent to nearly the entire turno-
ver of one year.
When the Iisalmi foundry started up, there
were 46 employees. However, the Helsinki work-
ers did not want to go to Iisalmi. The older ones
opted for retirement, and the younger ones went
to other sections of the company, or to completely
different foundries. The mid-1970s was a prob-
lematic time in other ways as well. The economic
slump hurt Suomi Foundry badly. Big clients
such as Wärtsilä and Lokomo sharply cut back on
their orders. The year 1976 was just barely rescued
by substantial orders from the Norwegian Esco
Armaturfabrik. Turnover nevertheless declined
by one percent over the previous year. In 1974 the
company’s name was changed to Suomivalimo Oy.
Finally, at the end of 1977 the company’s board
of directors decided to close down the Helsinki
foundry completely. Originally the idea had been
that the Helsinki foundry should continue until
the turn of the decade, at least. The minutes of
the meeting contained only a brief notation, but
for Yrjö M. Lehtonen it was one of the most dif-
ficult decisions of his career. However, ultimately
the decision proved to be exactly the right move.
Iisalmi worked very well as a location for the
foundry.
In the early 1980s the numbers in the annual
report looked grim again. Olavi Jaakkola, who had
started on the board of Suomivalimo in 1979, and
Olli Arppe looked serious as they listened to a re-
port by Yrjö M. Lehtonen. Sales were not happen-
ing, and turnover had remained at the previous
year’s level of 32 million marks. The recession was
getting worse again, and was expected to continue
through 1982. Some comfort came from a deal
with the Soviet Union worth 2.5 million marks.
According to Yrjö M. Lehtonen, the deal secured
the company’s employment, and helped it achieve
its goal for that year. Nevertheless the company’s
result for 1981–1983 was in the red. Something
new had to be done.
on 13 feBruary 1973 a new management took
over at Suomi Foundry. At a meeting of the
father and son it was decided that B. M. Lehto-
nen, who was already 72 years old, should step
aside from his position as managing director, and
that he should be replaced by 42-year-old Yrjö
M. Lehtonen. His mind was buzzing with new
ideas and modes of operation. He also decided at
the same time that he had to arrange a change of
generation in good time with his own sons. This
was in the interests of both the father and the
company.
New regulations for working conditions, and
the massive costs that they would impose on the
Helsinki foundry, were one reason why Yrjö M.
Lehtonen decided to close down the foundry in
Helsinki, and to set up a new one in Iisalmi in
1975. The Mayor of Helsinki was also putting
pressure on heavy industry to leave the Finnish
capital. A plot of land covering 7.5 hectares was
bought in Iisalmi. The whole investment would
end up costing about ten million Finnish marks,
The 1970 s and 1980 s New management, and big decisions
cas t i ron component for mach ine bu i ld ing indus try -
a company with nine l ive s 1 1
Mika Kamensky, a trainer and consultant in
corporate economics, was brought into the com-
pany to help management. Kamensky believed
that the time of strategic management would
come to Finland too, and he wanted Suomivalimo
to be one of the first Finnish companies in which
it was tried. Finally he was invited to join the
board of directors of Suomivalimo, and later to
those of JOT Companies, and Santasalo-Gears.
After Kamensky’s analyses it was apparent
that the only sensible survival strategy for the
company was to use corporate purchases for
growth in both the market share and business
base. Although times were hard, money in itself
was not a problem. Yrjö M. Lehtonen had good
relations with the Union Bank of Finland.
The first acquisition, in 1984, was the Iisalmi
engineering works, which Partek wanted to get
rid of. The next company to be bought, in the
same year, was pump importer and manufacturer
Tekno-Montan, which went for three million
marks, and whose valuable property in Hert-
toniemi was soon sold off for seven million.
This was sufficient for a down payment for the
purchase of the Nieminen Foundry in December
of the same year. Another foundry, Satakun-
nan Valu was bought in January 1985, also at a
fairly low price. In September of the same year
Suomivalimo bought the Högfors Foundry, which
was rich in tradition. This was followed by a few
more corporate purchases, which helped the
concern grow. One of the most important was
the purchase of Santasalo Gears in 1986, which
opened completely new markets to Suomivalimo.
cas t i ron gearbox beam for heavy t ruck indus try.
b .m . l ehtonen and yr jö m . l ehtonen agreed on tr ansfer of power in 1 973 .
12 componenta
after the purchase, Santasalo-Gears started
up as an independent limited liability company.
Santasalo was listed on the Stock Exchange in
1988. World stock markets had crashed exactly a
year before the share issue, but in 1988 the mar-
ket was favourable. All of Santasalo’s shares were
subscribed to in just a few hours. The Lehtonen
family kept 77 percent of the shares, but for the
first time, the Lehtonen family company had
taken the company onto the stock market.
Yrjö M. Lehtonen’s solution was implemented
in October 1990. As a result, Santasalo-Gears was
placed under the ownership of Heikki Lehtonen.
As a result of the decision, the owners of the JOT
Companies were Ari, Antti, Anna-Maria and
Yrjö M. Lehtonen, who however, kept the voting
rights in his hands.
Antti Lehtonen was named President of JOT
Companies. Heikki Lehtonen would head his
own company, Santasalo-Gears.
cas t i ron s tator fr ame for mach ine bu i ld ing indus try.
The late 1980 sSantasalo in the Stock Exchange, and the company splits in two
he ikk i l ehtonen s tar t ed as pr es ident and ceo of santasalo -gears in 1 987.
a company with nine l ive s 13
yrjö julin, the director of the foundry
group of JOT Companies Ltd., knew already in
the summer of 1991 that not things were not as
they should have been. In the autumn it became
a certainty. Finland would face unprecedented
mass unemployment and a deepening recession
in the following years.
On the financial markets, Finland teetered
on the brink of bankruptcy, and intervention by
the International Monetary Fund. The »strong
mark« policy had been the official doctrine of the
central bank and Finnish politicians. With that
policy in mind, Finnish companies had financed
their operations with loans denominated in for-
eign currencies, which appeared to be cheap, but
which contained a bomb hidden inside.
Antti Lehtonen, the President of the group,
lamented: »The worst of this is not the depth
of the recession, but its expected duration.«
Financial markets had begun to go out of control
already in the late 1980s, and the final nail in the
coffin was when the Finnish mark was left to
float in 1992. According to the most optimistic
assessments, the economy would start to recover
already in 1992. Pessimists said that realistic
signs of recovery might be seen in the late 1990s.
It turned out later that the turning point was
actually October of 1993.
However, Antti Lehtonen insisted in the JOT
Companies newsletter that the group would
continue its battle against »the forces of nature«.
Invoicing declined by as much as 20 percent during
the recession.
The courageous battle did have its victims.
The foreign currency loans taken out by JOT
Companies had not been sufficiently secured, so
the exchange rate losses had to be paid off. JOT
Companies had fallen into debt in the 1980s, when
it made many corporate purchases. Now the time
for paying back the loans came in the middle of
the recession, and in foreign currency, which had
become more expensive.
Although the company had experienced many
difficult times during its 75 years, the recession of
the early 1990s was a question of life and death for
the family company.
The solution was that Santasalo-Gears bought
24 percent of the shares of JOT Companies from
the beginning of 1993. In this way, Ari and Antti
Lehtonen got money, which they reinvested in
the company. The company managed to get the
dangerous haemorrhage to stop momentarily.
However, the situation was not permanently
resolved. Money taps had been cut off to many
companies in 1993. The future of JOT Companies
required more decisions. Heikki Lehtonen had to
decide in the spring of 1993 how to rescue the fam-
ily company. The only solution was for Santasalo-
Gears to buy all shares of JOT Companies.
At the same time Heikki Lehtonen had to take
the biggest risk of his life. He became the main
owner and manager of the family company.
These decisions created the foundation for
today’s Componenta. The new name was not
acquired until much later, from Sweden.
cas t i ron crossmember for heavy truck indus try.
1991–1993Recession in Finland, a whirlwind in the company
14 componenta
Not all of the purchases were successful. In
1997 the Group bought two companies: Asko
Components, and the business operations of the
Swedish Componenta Industri. After the corpo-
rate acquisitions, JOT Components grew to be
the largest producer of cast metal and malleable
components in the Nordic Countries. Turnover
in the Group exceeded one billion marks for the
first time.
As a result of the acquisition of the Swed-
ish company, more than half of the production
of JOT Components was in Sweden. Half of
the employees were also in Sweden and half in
Finland.
The Swedish foundries proved to be too
costly in light of the condition of the companies.
In retrospect, the corporate acquisition proved
to be a mistake. The buyers did not get a chance
to examine the company closely enough, because
the company that was being bought was in the
process of being listed on the stock exchange.
The Swedish company had seven units, only
two of which were in the same line of business
as JOT Components. The buyers needed to
get rid of five of the units. Ultimately the two
remaining units were merged with the business
operations of the buyer.
The years that followed the purchase that
was made in 1997 were a very trying period.
Companies were shut down and others were re-
organised. The management of the concern had
to spend all of its time on reorganisation.
1993–2003The new Millennium arrives, and today’s Componenta is born
cas t i ron p lane t carr i er for d i e se l & w ind indus try.
the open ing of santasalo’s p lant in ch ina was ce lebr at ed in 1 997.
in the 1990s the Santasalo-JOT Group grew
internationally. The growth required plenty of
capital – both monetary and intellectual.
The company’s narrow management resources
were stretched to the limit, when the companies
that had been acquired needed to be taken
over and combined with the existing working
methods of the Group.
a company with nine l ive s 1 5
2003–2008New directions – the Netherlands and Turkey
In retrospect, JOT Components calculated that
the Swedish company had cost too much, but
even more costly was the time that the manage-
ment spent on reorganisation alone. That proved
to be more difficult than anyone would have
imagined.
The decision was made in 2003 to shut down
the Swedish foundry in Alvesta. The Swedish
labour union movement appealed the closure
to the European Commission. Meanwhile, the
Commission decided in 2004 that real estate ac-
quisitions by the City of Karkkila had amounted
to illegal subsidies for Componenta. Compo-
nenta has appealed the decision to the European
Court of Justice. The process is still underway.
In 1999 Heikki Lehtonen was contacted by
Metso Corporation, which manufactured gears
in Rautpohja in Jyväskylä. Metso wanted to buy
Santasalo’s gear business. Metso had not been
interested in a new factory in China, but it was
interested in factories in Finland, Germany, and
Canada.
The deal was signed in late November 1999.
At the same time, the corporation decided to
concentrate on components needed by industry.
One round was over, and the company was again
a foundry enterprise.
In 2001, the other owner of the factory in
China, SEW-Eurodrive, bought out Compo-
nenta’s share. The company got its own back.
The Chinese gear factory has grown quickly, and
now it is the world’s largest gear factory and the
market leader in China.
Choosing the strategy was not easy. The
company’s management and its main owner,
Heikki Lehtonen, saw that foundry products
could grow to be large players in Europe.
The company had gone back to its roots,
and from 2000 it has operated under the name
Componenta. The name came with the Swedish
corporate purchase. It is all that was left over
from that deal.
componenta was not spared the effects of the
stagnation of the world economy in 2000–2001.
The internet bubble which had emerged in the
economy burst in 2000, and in 2001, the 9/11 at-
tacks in New York dampened economic growth.
In 2001 Componenta did not reach the goals that
had been set for its result, and 2002 also looked
like it would be difficult.
At the same time, the reorganisation of the
Swedish companies continued. The company’s
management did not have time to create a strat-
egy for the future.
Strategy work became possible for 2002.
Componenta defined its strategy through 2006.
In his President’s Review in the Componenta
Annual Report for 2002, Heikki Lehtonen pre-
dicted that Componenta will become »a compa-
ny that is the preferred engineering co-operation
partner by 2006«.
Componenta had made the decision to close
down the Osby machine shop in Sweden, whose
profitability hinged on a single client. When the
biggest client, Scania, chose another subcontrac-
cas t i ron component for heavy t ruck indus try.
16 componenta
tor, profits turned to losses. The machine shop
was closed down in 2002. Moving the Alvesta
foundry to Karkkila in 2004 brought an end to
the reorganisation phase of the units bought in
Sweden.
In March 2005 Componenta bought a major-
ity holding in the Dutch foundry company De
Globe. Shortly before that Componenta had
given up its minority holding in Thermia, which
was specialised in heating. The money from the
sale allowed it to pay for the Dutch acquisition.
Later it emerged that the foundry in the
Netherlands was a good acquisition. Compo-
nenta put De Globe into the black. The price that
was paid was not too high in comparison with its
performance capacity. The sales and clientele of
Componenta and De Globe complemented each
other.
An ambitious goal began to take shape as
Componenta’s strategy. The company wanted
to be the European market leader of cast com-
ponents by 2010. The goal was approved by the
Componenta Board of Directors in 2005.
The new, ambitious plan called for both or-
ganic growth and corporate purchases.
In 2005 moves were made to turn the Dutch
foundry into part of the Componenta organisa-
tion and corporate culture. Improvements had
been made at the Karkkila foundry, and ad-
ditional production capacity had been built in
Pietarsaari as well.
On a personal level Heikki Lehtonen was tak-
ing a giant leap in March 2006. He was sitting in
a plane, looking down at the sea of light of a large
city. There were ships anchored in the sea. There
were cars on the roads causing congestion, even
though it was the evening. The sharp minarets of
mosques rose to the sky.
Lehtonen wondered what he was doing in
this city, which was not familiar to him, and in
this country whose culture and language were
completely foreign to him.
measur ing at the ne w mach ine shop in orhangaz i , turke y.
orhangaz i ’ s ne w mach ine shop was taken in use in autumn 2008.
a company with nine l ive s 17
He soon landed in Istanbul, and that is where
a process began, which led to the biggest corpo-
rate acquisition of Componenta’s history.
Componenta had learned that the Turkish
Koc Group wanted to sell its foundry company
Döktas. When Lehtonen met with the com-
pany’s management and visited the Döktas foun-
dry, he sighed with relief. The company was in
good shape, the management knew what it was
doing, and fortunately, spoke English.
Negotiations were held in the months that followed. Before August Componenta did not know if it was in the final stretch in the competition, which involved many other players in addition to Componenta. In August the dealings turned serious. Componenta needed to organise financing, which was not at all easy. In the final moments, a grouping of banks was brought on board to finance the deal worth more than eur 150 million.
Componenta had made a tiger’s leap. It had
bought a company that produced high-quality
cast iron castings, aluminium castings, and rims
for car wheels. The purchase put Componenta
among the leading European companies:
Componenta was now Europe’s second largest
independent cast component company. Person-
nel nearly doubled: Componenta had 5,250
people working for it at the end of 2006. Only
22 percent of the company’s employees were
Finnish. Componenta also became a multicul-
tural company.
Componenta’s President Heikki Lehtonen
believes that there is a resilience in the genetic
heredity of the family company. During its 90
years the company has survived wars, stock mar-
ket crashes, global upheavals, its own mistakes,
and changes in its clientele and the market. The
Lehtonen family has experienced many chal-
lenging times over a period of four generations.
Componenta had proven to be a company
with nine lives – at least.
cas t a lum in ium crossmember for automot iv e indus try.
1 8 componenta
a company with nine l ive s 19
core s tor age a t the orhangaz i foundry.
text
Selim Saukkomaa and Harri Saukkomaa
sourc es
Jukka Kortelainen: Suomivalimo Oy 1918 –1983 (1983)Juhani Aromäki: Just on Time – How a small family foundry
became the Santasalo -JOT Group (1998)Componenta annual reports 2000 – 2007
Heikki Lehtonen’s interview
cas t i ron component for heavy t ruck indus try.
COMPONENTA A Company with Nine Lives
Contents
1918 The Iron and MeTal Foundry SuoMI IS eSTablIShed
1920 sSTock MarkeTS craSh, Foundry ThrIveS
1939–1943ProducTS oF The Foundry are needed In war and Peace
1948–1963 develoPMenT oF own ProducTS
The 1970 s and 1980 snew ManageMenT, and bIg decISIonS
The late 1980 sSanTaSalo In The STock exchange, and The coMPany SPlITS In Two
1991–1993receSSIon In FInland, a whIrlwInd In The coMPany
1993–2003The new MIllennIuM arrIveS, and Today’S coMPonenTa IS born
2003–2008new dIrecTIonS – The neTherlandS and Turkey
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