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The Internationalization of Spanish Companies: Ferrovial, The Rise of a Multinational

Rafael delPino GM'86, SM '86: February 28, 2008; Running Time: 00:48:02

About the Lecture

About the Lecture

Move over, Italy. Rafael del Pino is here to claim Spain’s rightful spot as a major European player in the global infrastructure market. Founded by del Pino’s father in 1952 as a builder of sleeper cars for trains, Ferrovial has diversified into a conglomerate with a hand in construction, real estate, road building design and operation, water treatment and desalination, airport ownership and operation, among other activities, and with 104 thousand employees in 43 countries. Del Pino describes some of the milestones passed, and hurdles overcome, during Ferrovial’s 50 years of expansive growth.

The company’s largest triumphs come from winning contracts in other nations: Ferrovial developed toll roads in Colombia, then Chile, and in 1988 bid on a huge ring highway around Toronto that involved committing 600 million Euros of Ferrovial’s own money. Not all Canadians were receptive to a Spanish company building and running a road with electronic tolls, and indeed, when the system didn’t work correctly at the start there was a great deal of public criticism, followed by a big fight with a new, opposition government.

Ferrovial bought its first airport in northern Chile in the late 90s, “in the middle of a desert, with some copper mines around and not much else.” They got the bid because of “a good relationship to the public works minister,” and because no previous experience was required. In 2004, Ferrovial “became more courageous,” and invested in the U.S., buying the Chicago Skyway from the city. Other acquisitions included a public works builder in Poland, and a joint venture in the U.K. with a company that runs three of London’s Tube lines.

Work with London's Tube lines made Ferrovial's acquisition of BAA (which runs Heathrow Airport) possible. Ferrovial, says del Pino, leverages airports as much as it can, and the BAA enterprise will leave Ferrovial with a net loss in 2008 of at least 300 million Euros, some of which flows from extensive renovations and rebuilding at a key terminal. Del Pino says the company’s shares have fallen by half in one year as a result of this venture and that “we’re being punished by uncertainty with BAA.” He notes sarcastically, “This is how the market reflects our wonderful management skills.” He’s dug in for the long run, though. “We’re a UK company based in Madrid.”

Lecture Details

Location: Wong Auditorium

About the Speaker

Rafael delPino GM'86, SM '86

Chief Executive Officer and Chairman, Grupo Ferrovial

Rafael del Pino currently leads Ferrovial, one of Spain's largest engineering and construction firms with a workforce of more than 100,000. Ferrovial is involved in construction projects throughout the world, including the designing, financing, building, operating and maintaining of toll roads running in the U.S. and Canada and the Chicago Skyway Bridge. In June 2006, Ferrovial acquired BAA, the company that owns London's Heathrow airport.

Rafael del Pino has an undergraduate degree in Civil Engineering from the Universidad Politécnica in Madrid and obtained an M.B.A. from MIT Sloan School of Management.

Rafael delPino GM'86, SM '86

About the Host

About the Host

MIT Sloan School of Management

The MIT Sloan School of Management, based in Cambridge, Massachusetts, is one of the world’s leading business schools — conducting cutting-edge research and providing management education to top students from more than 60 countries. The School is part of MIT’s rich intellectual tradition of education and research.

MIT Sloan began in 1914 as engineering administration curriculum in the MIT Department of Economics and Statistics. The scope and depth of this educational focus have grown steadily in response to advances in the theory and practice of management to today’s broad-based management school.

A program offering a master’s degree in management was established in 1925. The world’s first university-based executive education program — the MIT Sloan Fellows — was created in 1931 under the sponsorship of Alfred P. Sloan, Jr., an 1895 MIT graduate who was then chairman of General Motors. A MIT Sloan Foundation grant established the MIT School of Industrial Management in 1952 with a charge of educating the “ideal manager.”