Hidden Swiss Locomotive Billionaire Laid Track For Fortune Across Europe

Apr 1 2014, 10:19am CDT | by

Hidden Swiss Locomotive Billionaire Laid Track For Fortune Across Europe
Photo Credit: Forbes Business

Peter Spuhler is the kind of man who presidents want to meet. Just last month, Spuhler, owner of Swiss traincar-maker Stadler Rail, visited Belarusian President Alexander Lukashenko in Minsk. It was an opportunity for the politician to smooth things over with the businessman.

They chatted in an august chamber with gold paneling, plush chairs and red-and-green Belarusian flags draped behind the president’s chair. Details of their conversation remain a closely guarded secret; in a media release from the presidential palace, Lukashenko would only say they ironed out “exigent issues”–unsurprising given Belarus’ economic and political impoverishment–behind Stadler’s plan to build a factory outside Minsk. That’s where it’ll make double-deck traincars for a new transit systems in Belarus and in neighboring Russia. Lukashenko, who is viewed as a near-dictator in the West,  promised to clear away any obstacle. “We refer to you as an example of what kind of investors we are interested in welcoming in Belarus,” he told Spuhler.

A grand welcome–a deserving one, too. Spuhler, 55, possesses a keen sense of how to expand a business. He has taken Stadler from a humble manufacturer of locomotive parts (based in a small city near the German border) to one of the largest rail businesses in the world with operations in Switzerland, Germany, Poland, Hungry and now Belarus. En route, he has amassed an estimated $2.5 billion fortune from his 83% stake in Standler.  “I always look left and right when traveling through Switzerland and when I see a Stadler train it’s always a kind of recognition,” Spuhler told Swiss Broadcasting in 2006. (Stadler confirmed facts for this story, but declined to make Spuhler available.) “Every year you can see more of our trains. It’s a good feeling.”

Spuhler grew up playing conductor with a model train set, but didn’t foresee his future track involving railroads. He studied business administration at nearby St. Gallen University, where he found himself more inclined to strike out on his own than to become a Swiss banking type. (“I always wanted to be an entrepreneur.”)  While at school, he played ice hockey and served as an officer in the Swiss Army.

A year after graduation in 1986, Spuhler took a job at Bussnang, Switzerland-based Stadler, a producer of small locomotives and the parts to equip them. It had been founded five decades earlier by namesake Ernst Stadler in Zurich and had achieved only modest success (then employing 18 people and booking $5 million in revenue). Spuhler had married Stadler’s granddaughter, and in 1989, he bought the company from his wife’s grandmother for $6 million.

After that, the real work began. Spuhler first acquired Schindler Works in Alternhein, today the site of a large factory where Stadler makes double-deck railcars and streetcars; picked up a unit from crumbling Swiss Locomotive and Rail Works; and put together a joint-venture with Adtranz that it eventually consumed whole. By 2005, Stalder had a 1,600-person staff and $678.5 million in revenue.

More acquisitions followed, as well as a push into custom-designing traincars, a way to differentiate itself from competitors who favored a one-size-fits-all approach. Stadler has built cars to climb to Germany’s highest peak, designed trains to withstand brutal Helsinki winters and constructed locomotives to carry freight in Brazil from Sao Paulo to the Port of Santos, Latin America’s busiest port. As a result, Stadler revenue is now roughly $2.6 billion.

Away from Stadler, Spuhler spent 13 years in the Swiss parliament, assuming office in 1999. He was a member of the right-wing populist group known as the Swiss People’s Party. In keeping with the party’s conservative philosophy, Spuhler voiced his support for lower corporate taxes and reducing the national debt. And true to his pro-business bent, Spuhler lobbied his colleagues to admit more foreign workers (wealthy, isolated Switzerland has long feared the consequences of mass immigration) and decried the minaret ban in 2009, saying the move could prompt boycotts from Muslims.

At the same time, Spuhler continued to run Stadler with a tight fist. In 2006, Spuhler, the sole shareholder, vested 10% of the company with his top executives, and then sold a 20% portion to Capvis, the largest private equity firm in Switzerland. He wound up regretting the decision. In 2012, Spuhler established plans to buy back the 20% owned by Capvis. He immediately purchased 10% and decided to buy the remaining 10% over three years. He now owns 83% of Stadler. Once the buyback is done next March, Spuhler expects a 5% stake will go to his executives. Based on comparable figures from publicly traded firms, Forbes estimates Stadler is worth $3.1 billion. Stadler says the company is worth less–closer to $2 billion.

As for the project with Belarus, Spuhler has said 70 Belarusian technicians are now in Switzerland studying in advance of one day runningn the new Stadler plant near Minsk. If the media release from the Belarusian president is any indicator, Spuhler’s discussion with  Lukashenko left him convinced he’ll be able to fully finish the facility by 2016 and deliver the 25 double-deck cars to Belarus. “I believe that we really enjoy very tight and promising cooperation,” Spuhler said after meeting the president. Surely Spuhler of all people knows how to turn promises into profits.

Zainab Amin contributed reporting to this story.

Reach Abram Brown at abrown@forbes.com.

Source: Forbes Business


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