Spread out over five continents, Irizar Group, a company that specializes in the production of luxury coaches with headquarters in Spain, credits its recent jump in sales, production levels, and global expansion to its management system and workers. Rachel Hartman reports.
The buses produced by Irizar Group, a company based in the northern region of Spain, literally roam the globe. This company began as a small family-owned business. Today, it is an international leader in luxury coaches.
Just how did such a small company become a global success? The secret lies not in the wheels, but rather its workers, according to Gotzon Gomez, senior director at Irizar Group. “We’re a people-based project,” he says. “Our management system is a horizontal one; the real owners of the company are the workers.”
This, together with the great care Irizar takes in producing high quality vehicles, has helped the Spanish company boost both sales and manufacturing levels during the last decade. In addition to its operations in Spain, the group has plants in China, Morocco, Brazil, Mexico, India and South Africa. With locations now on five continents, the company reaches 85 different countries around the world.
A LONG HISTORY OF VEHICLES
The story of Irizar first began in 1889, when the Irizar family founded a passenger transport company. The business focused on producing high-quality carriages and stagecoaches. It carried out these operations for the next three decades; then in 1927, it began to make parts for buses and coaches.
Activities continued at a similar pace for the company during the next decades. Then in 1991, Irizar changed both its strategic direction and management style. In terms of strategy, company officials began to look into establishing a presence at a global level. When it came to management, Irizar stepped away from the hierarchy-based model. In its place, it set up a design based on its very own workers. Employees were given more responsibility, thus providing them with a true sense of ownership.
Global expansion started in 1995, when the company opened a plant in China. In 1997, it set up operations in Morocco. The following year, Irizar headed across the Atlantic Ocean and opened a plant in Brazil, with the hope of using it as a launch pad to reach the Latin American market. In 1999, the company opened its doors in Mexico. In 2001, Irizar entered India; in 2004, it established itself in South Africa.
Currently, Irizar has one plant each in China, Morocco, Brazil, Mexico and South Africa. In India, it has two plants. It has also expanded operations in Spain in order to accommodate its increase in production levels.
Taking on a global approach has proven to be a wise choice for the company. In the beginning of the 1990s, Irizar employed around 250 people. Today, the company has more than 3,000 workers throughout the world. Its operating income has increased from 20 million euros in the early 1990s to nearly 440 million euros in 2007. Officials expect to see that number increase even more during the coming years.
LEADERSHIP THROUGH QUALITY
As it has expanded, Irizar has taken careful measures to produce the same type of quality in its various plants. “The buses manufactured in Spain, Brazil, Mexico, or any other country, are all produced with the same materials,” explains Gomez. “We’ve never used the strategy of producing a cheaper product with materials of lower quality.”
In order to manufacture premium buses, the company has incorporated a series of values into its production process. These include safety, innovation, design, reliability and profitability. By listening to its clients, the group can assess various needs and create an appropriate design.
Those that step inside a bus made by Irizar will find state-of-theart safety features for both the driver and passengers. In some areas, the company’s coaches far surpass the competition in terms of safety. This is because, regardless of the standards in certain countries, Irizar strives to provide the most secure vehicle possible. “Even if a country doesn’t yet have certain safety requirements, we still put them in our buses,” Gomez says.
Irizar currently produces three types of luxury coaches. The bestselling model, known as the Century, has sold more than 20,000 units on a global level. Designed to travel on regular and mediumdistance routes, this bus has won numerous awards and recognitions during its lifespan.
The second model, called the Irizar PB, first entered the market in 2001. Many drivers of the coach find that it has impressive stability on the road. This is mainly due to its low center of gravity. Its interior design conveys comfort for passengers. The Irizar PB has won various awards, including “Coach of the Year in Spain” in 2002 and “Coach of the Year in Europe” in 2004. Today, more than 5,000 of these vehicles are driven on roads around the globe.
The third type of bus, called the Irizar i4, is relatively new to the scene. It made its debut in 2007, and is designed for short and medium-distance travel. Its safety features are well ahead of its time, and its interior provides high levels of comfort for passengers.
In each of these models, Gomez emphasizes the company’s ability to create a high-quality product. “We’re not dedicated to making a low-priced, high volume product,” he explains. “We always focus on premium products.”
Producing top-of-the-line coaches means that the company focuses on quality rather than quantity. In 2007, it produced approximately 4,000 buses and brought in around 440 million Euros. “This year, we expect those numbers to rise,” says Gomez.
This strategy has enabled the company to take on leading roles in various markets. In Europe, Irizar ranks among the top three bus companies. In other areas, such as Mexico, it is clearly the market leader. Over the years, the company has received numerous awards and recognitions for its various products.
Looking back on the past decade, Gomez notes that the company has achieved remarkable growth. “Now we want to consolidate all of our projects,” he says. During the coming years, the company plans to build up its various operations around the world. It also plans to look into meeting the needs of the different markets it participates in.
While continuing to grow is important, Gomez reiterates that true success lies in the workers. “Products aren’t always important in today’s market,” he says. “Sometimes it’s the values that really make a company. Our focus on the people is what sets us apart from the competition.”
Others have taken notice of Irizar’s horizontal management model. In places like Brazil, Irizar stands out as an employee-friendly company. “All of the workers at our plant in Brazil are Brazilians,” says Gomez. “And the plant has become one of the top companies in its area to work for.” Various universities now teach the basics of the Irizar management model in their business programs.
From carriages and stagecoaches to luxury coaches, the long history of Irizar is one that has continuously focused on quality and comfort. Its ability to enter the global market with its premium products has helped propel the company’s sales and production levels. And the high commitment it places on its employees has enabled the company to become a model to follow. In 2009, when the company celebrates its 100-year anniversary, both company officials and workers will have much to celebrate.