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In 1994, after more than 40 years in business, Konecranes’ precursor SMV was a leading lift truck company. But the financial crisis hit the company hard, and it went into reconstruction. This certainly led to dramatic times, but as it turned out, was also the exciting start of the next chapter in SMV’s history.
Hit by the financial crisis
In the early 1990s, a global crisis struck the financial markets, including in Sweden. It spread like wild fire and many good companies were dragged towards bankruptcy. In Småland, in southern Sweden, SMV was unable to pay its loans, and the bank took over ownership of the company.
In these uncertain times even the banking system was on its knees. To avoid a financial collapse the Swedish state initiated a bank rescue program, overtaking insolvent banks. This included the bank now owning SMV. In the reconstruction process, operational responsibility of SMV was delegated to the investment company Borgkronan. They were given the task to put SMV on its feet again, but lacked experience from the lift truck industry. To succeed, it was crucial to find the right people.
The Group of 9
A cold January morning in 1994, at another large Swedish lift truck company, CFO Paul Westergren walked down the hallways thinking about the future. With a new company leadership, not sharing his visions, maybe it was time to do something else?
Talking to some of his colleagues, it became apparent that Paul was not the only one looking for new opportunities. Soon a group of 9, with different competences, had been formed. At that time they did not know that something big was just around the corner.
A perfect fit
The Group of 9 were not resting on their laurels, they toyed with the idea of maybe teaming up elsewhere. Starting something completely new, perhaps, or approaching one of the big players to offer their services?
The stars were apparently aligned. The rumours that there was a group of senior lift truck experts looking for opportunities reached Borgkronan. Contact was made and it soon became obvious that this was a perfect fit. Borgkronan would get the lift truck experts they needed to run the company, the Group of 9 would get a new platform to build their future. Together they could breathe new life into SMV.
– I’m quite sure I could never had done something like this myself. We needed the competence from all 9 of us. Everyone in the group had their respective strengths that made it possible to realize our bold plans, says Paul Westergren.
We have a deal
The new entrepreneurs started to draw out the plans during spring 1994. A demanding task that was extremely important to get right. Even if they all were experienced professionals, high risks were involved in going into a project like this, putting at stake both huge amounts of capital and their own careers. But if someone had what it would take, it was the Group of 9.
Borgkronan was presented with a 5 year business plan, including everything from product development to marketing. Legal formalities were taken care of and a contract was on the table in July. The contract was signed during a final meeting the day before the summer holidays. Borgkronan offered a long-term financial engagement, the Group of 9 offered their competence. They were in the lift truck business together, as founders of a revitalized company - now named SMV Lifttrucks.