Engesa

When Engesa entered the defense sector, a modernization program was taking place driven by the alliance of the Brazilian Armed Forces with industrialists, state-owned companies and multinationals. It formed a military-industrial complex, which became one of the largest in the Third World during Brazil's military dictatorship, with a strong presence in this international market. Defense companies received demand from the country's Armed Forces, intellectual products from universities and research centers (such as the Army Technological Center) and subsidies and credit from government institutions. The army was undergoing a reorganization of its order of battle, creating a mechanized cavalry that would be furnished with Engesa's armored vehicles.

The collaboration of the Brazilian Army and the State in the development of Engesa occurred in the financial and research and development fields. The latter was especially relevant in the initial stage, marked by improvisation, decreasing later with the accumulation of experience and the shift to the foreign market. One example was the labor of officers from the Military Institute of Engineering (IME), who were rewarded with unaccounted "gifts", such as food baskets and money. Such exchange of favors is common in the arms industry due to its dependence on government institutions. Official support was assured by skill in the field of politics, in which Whitaker personally participated. In 1982 he was appointed president of IMBEL; it was a way of energizing the state-owned company, which had "a certain character of a public department". IMBEL began to live in "symbiosis" with Engesa.

Products

In June 1971, the VBB, now called "Wheeled Reconnaissance Car" (CRR), had its studies, project and industrial designs transferred to Engesa so that it could begin production. The transfer is common in developed countries, but in Brazil it was a milestone. The choice of Engesa and not Bernardini to take over the armored vehicle was due Whitaker's openly nationalist and sympathetic views to Brazil's dictatorship, as well as being a friend of lieutenant colonel Pedro de Mello, the commander of the Working Group of Automobile Engineers. The inherited technology became the 6x6 EE-9 Cascavel reconnaissance vehicle, initially with a 37mm cannon and later with a 90mm cannon.

Another transfer of technology, initiated at the Regional Motor Mechanization Park of the 2nd Military Region (PqRMM/2), was the Amphibious Troop Transport Car (CTTA), also 6x6, armed with a machine gun turret. It became the EE-11 Urutu in the hands of Engesa, which equipped both with its "Boomerang" suspension. Combined production reached thousands of vehicles, being the company's most numerous armored vehicles. They have seen combat in current conflicts such as the Iraqi Civil War (2011–2017) and the Libyan Civil War (2014–present).

Sales of adaptation kits for trucks declined in the late 1970s, with the latest successes being transport platforms for Scania models and trailers for Mercedes. The experience gained allowed the development of Engesa's own version of the GMC truck, the EE-25, designed hastily together with the EE-15 to accompany the sale of the Cascavel and Urutu, thus offering "complete packages". They were launched in 1974 and were capable of 1.5 or 2.5 tons off-road or double that on regular roads. The EE-25 was the best-selling vehicle, exceeding the production of the Cascavel or Urutu. The line of military "utilities" was completed by the EE-50, a 6x6 with a capacity of five tons (ten on a regular basis) from the late 1970s; the EE-34, a pickup truck using technology from Envemo, purchased in 1983; and the EE-12 or Engesa 4, a jeep presented in 1984. Rustic and with good off-road performance, it became the company's most successful product in the civilian market.

The EE-15 also had a civilian version, but its price was not competitive. Exclusive to this market, the EE-510 was announced in 1976, an articulated forestry tractor with a capacity of ten tons and seven meter logs. It did not sell much because it was a niche product in the reforestation of paper and cellulose industries, such as Aracruz Celulose and Klabin S.A. In 1981, the EE-1124, a 14.5 ton 4x4 agricultural tractor, was launched, with the EE-1128 version, with a turbo engine, and its equivalent without a cabin, the EE-1428, in the following years. The agricultural ones were the largest on the market, expensive and of high quality. Both forestry and agricultural production were highly nationalized. The fall in military exports, culminating in the 1981 crisis, resulted in an effort to diversify. The production of tractors designed years earlier, with financing from Finep and utilities, expanded, from 1983 onwards, the domestic market's share of sales. However, civil lines received less attention from senior management, being, in the words of a company interviewee, the "ugly ducklings".

The line of wheeled armored vehicles continued with the EE-17 Sucuri tank destroyer, mounting a 105 mm cannon on the Cascavel chassis. Presented in 1977, it was a technical failure. When the Sucuri II, an improved version, appeared a decade later, the market was already taken over by the Austrian SK-105 Kürassier and there was no series production. The other wheeled vehicle, the small EE-3 Jararaca reconnaissance vehicle, also had technical limitations, but a small quantity was produced.

Bernardini, Biselli, Novatraction, Gurgel and Moto Peças were competitors in the Brazilian market, although smaller. Among them, Bernardini worked in the tracked vehicle sector, designing a combat vehicle for the Brazilian Army, the Tamoyo, since 1979. Aiming to conquer the tracked market, in 1982 Engesa decided to develop its own combat vehicle, the Osório. However, its main target was Saudi Arabia, which had opened an international competition for a new main battle tank. Advanced, Osório performed on par with its major power competitors in tests, but the Saudis ended up choosing the M1 Abrams in 1991 — possibly just feigning interest in the Osório to lower the price of the Abrams. The other tracked vehicle, the EE-T4 Ogum, a light air transportable vehicle, did not generate enough interest to go beyond the prototype phase.

Successes such as Cascavel and Urutu were characterized by "simple and flexible design concepts, low cost, good performance and reliability, easy handling and simple maintenance", results of Brazilian industry conditions; the low price was a result of the use of civilian components, especially trucks. Their demonstrated performance from the Egyptian–Libyan War (1977) and especially the Iran-Iraq War (1980–1988) then provided "real marketing". The presence of armored vehicles since before the start of the Iran-Iraq War guaranteed the following batches. With products suited to the needs of Third World buyers and battle proven, Engesa was able to capture value. In the 1980s, however, its civilian lines conquered limited markets. In the military sector, it reached a higher technological level (Osório), but was unable to achieve sales.

The eight military vehicles that Engesa produced in series — armored vehicles EE-3, EE-9 and EE-11 and utility vehicles EE-12, EE-15, EE-25, EE-34 and EE-50 — together numbered a total of 6,818 units. It is a lower number than those published at the time, such as Whitaker Ribeiro's claims that, in 1979, he produced half of the equipment in operation in the world in his sector, having the "largest company producing armored cars on wheels of the free world" and selling 5,000 units by 1985 (Defence & Armament magazine then estimated less than 1,700 which was not denied).

Divisions

Production activities were carried out at the company's headquarters in São Paulo until its transfer in September 1974 to the new factory built on land negotiated with the city of São José dos Campos, later called Engesa Viaturas. Shortly before, the company had purchased another plant in Salvador. Acquisitions, number of employees and facilities increased in the 1980s. Engesa became the holding company for a group of many other companies or sub-companies, classified as industrial production divisions (IPD) and service divisions (SD). After 1985 the child companies gained more decision-making autonomy. The parent company had 3,748 employees in 1987. The performance of the divisions was hampered by managerial inexperience and disregard for cultural and production incompatibilities between them, which did not necessarily increase Engesa's competitive advantage. Diversification thus resulted in organizational fragmentation.

IPDs

Engesa Viaturas (1979, São José dos Campos): Location of conversion and production of military and civil vehicles.

Engex S.A Equipamentos Especializados (1973, Salvador): In 1972 the Allis Chalmers factory in Salvador, capable of producing certain gears and transmissions, was purchased. The plant was responsible for machining activities and the production of truck adaptation kits and transfer boxes, the latter of which had quality problems due to the company's focus on large military contracts. Salvador was the major oil hub in Brazil at the time and at the end of the 70s, Petrobras needed to reduce imports due to the valued dollar. Thus, Engex produced sucker rods, downhole pumps and small and medium-sized pumping units. The first ones were exported. It later manufactured 90mm cannons for the Cascavel. It reached 1,111 employees in 1985–6.

Engesa Química S.A. (Engequímica) (1979, Juiz de Fora): Manufactured 90mm ammunition for the Cascavel with Belgian and Engesa technology and an IMBEL plant. It increased production to 20-30 thousand rounds per month and expanded to other types of ammunition, such as mortar and 105mm, and managed to export to Cyprus, Venezuela and Zambia. It had 754 employees in 1984.

Engesa FNV (1983, Cruzeiro): The FNV (Fábrica Nacional de Vagões) Veículos e Equipamentos S.A., a traditional company in the railway sector, also worked with trucks and buses and controlled Fruehauf, a manufacturer of trailers, semi-trailers and implements for trucks and containers. It had been in deficit since 1981. It was purchased for US$20 million. Under Engesa it reached 3,866 employees in 1986.

Engesa Eletrônica S.A. (Engetrônica) (1982 or 1983, São Paulo): Created with 70% participation from Engesa and the remainder from Philips do Brasil to produce embedded systems for the Osório and aircraft such as the AMX and Tucano. It had 212 employees in 1985. Its products were both civilian and military and included tactical radios and navigation systems.

Engesa Equipamentos Elétricos S.A. (Engelétrica) (1982, Jandira): At the beginning of the year, Engesa acquired controlling interest in Bardella Borriello Eletromecânica S.A, existing since 1911 and responsible for overhead cranes and wire drawing, sectors in which Engesa had no experience. In 1984 it was subordinated to the FNV. It manufactured electric motors and had 692 employees in 1986.

SD's

Engeagro (1977): Sold agricultural equipment.

Transgesa Transportes Engesa Ltda. (1983 or 1984): Redesignation of Transportadora Comercial FNV Ltda. in November 1984. It transported cargo by road.

Engevideo (1977): Created to serve Iraqi soldiers, it produced videotapes and training programs.

Aero Brasil (1983): Formed in association with Transbrasil, whose founder, Omar Fontana, was a long-time advisor to Engesa, for air cargo transport. One of their 707s, converted into VIP transport, was called a "flying carpet" and gained a reputation for money waste.

Axial (1980): Responsible for insurance brokerage and administration.

Engexco Exportadora S.A. (1976 or 1977): Created to gain independence and expand into markets not covered by Petrobras' trading company, until then used to intermediate exports. Exports were then mixed, Engesa and Engexco, until 1981. From that year onwards they went exclusively through the new trading company. It reached 91 employees in 1985–6. It was also used by other Brazilian exporters, mainly military ones. It brokered deals for Casa da Moeda, Embraer, IMBEL, Companhia Brasileira de Cartuchos, Arco-flex and Villares. Third parties even tried to sell poultry in Baghdad, which was not successful. Such contracts did not fit well with large arms sales.

Engepeq

After the shipment of the first Cascavels to Libya, in 1975, experimental engineering was segregated, with its personnel returning from São José dos Campos to São Paulo (later to Barueri, remaining together with the company's headquarters). There it took advantage of the tax exemption granted to research companies and sought funding from Finep for its research. It handled CAD/CAM used in 1980s projects. There were 220 technical employees and a product engineering division in each IPD.

Other

Apart from Engesa but with relocated employees, Whitaker Ribeiro created Ensec Engenharia em Sistemas de Segurança in the mid-80s. Designed to provide a security system for the new headquarters of the Casa da Moeda, it also served Vale do Rio Doce and Correios.

In view of Avibras' success with its ASTROS II missile system, Engemíssil was created in April 1986 to operate in this segment. In partnership with the Italian Oto Melara it began the development of the MSS-1.2 anti-tank missile. The ambition continued for a state-owned company to compete with Avibras. Thus, Órbita Sistemas Aerospaciais S.A. was created in January 1987, with a shareholding of 40% from Engesa, 40% from Embraer and 20% divided between IMBEL, Esca (which integrated CINDACTA) and Parcom (civil association of engineers that worked with brigadier Hugo Piva, vice-president of Órbita). In addition to the MSS-1.2, it would take on projects for the Piranha air-to-air missile and the Thunderbolt portable anti-aircraft missile, developed in conjunction with British Aerospace. However, after thirty months "it was nothing more than a modest set of warehouses and workshops", due to the crisis at both Engesa and Embraer. It ended up being extinguished in October 1991.

Production vehicles

Reconnaissance vehicle: EE-3 Jararaca;

Armored car: EE-9 Cascavel, It was well used in Iraqi Armed forces during the Iraq-Iran war from 1980 to 1988 and was used heavily in the Gulf War, it is still in service with Iraq, Zimbabwe, and a number of South American armies,

Armored personnel carrier: EE-11 Urutu, It was well used in Iraqi Armed forces during the Iraq-Iran war from 1980 to 1988 and the subsequent Gulf conflict,

Trucks: EE-15, EE-25, and EE-50,

Light Vehicles: EE-4, EE-12 and EE-34,

Air-portable Armored Vehicle: EE-T4 Ogum,

Tank destroyers: EE-17 Sucuri I and EE-18 Sucuri II,

Main battle tank: EE-T1 Osório.