After you defeat the Factory Chief and Gunyolk, you finally come face to face with your nemesis, Smithy.
Part 1
In the first part of the battle, Smithy is accompanied by Smelter, which is weak to Thunder. Smithy can use Smelter to create Shypers that attack you with regular attacks and Sword Rain. You can defeat Smelter if you wish, or you can just focus on Smithy. His multi-target attacks are Sledge, which does moderate damage, and Meteor Swarm a high-damage attack. He can cast Mega Drain, damaging a single character.
Part 2
There will be a cutscene, and you will fall into a new area, where Smithy will transform. Throughout the battle, Smithy's head will change forms, but it doesn't regain any health when it changes forms. Smithy's body can be attacked separately to temporarily prevent its head from changing forms. It will say "Guooo, can't move" when it is temporarily defeated (and it will cast Shredder, removing Attack Up and Defense Up), and it says "I'm burning with power" when the body starts working again.
The body can shoot a bullet at a single character for high damage, and small pellets at a single character for moderate damage. It can hit single characters with its hammer.
The Tank Head is weak to Special attacks (especially Thunder). The Tank Head can cast Magnum, instantly defeating a single character unless they block it. It can shoot a bullet at a single character for high damage.
The Magic Head is weak to physical attacks. The Magic Head can cast Arrow Rain, Sword Rain, Spear Rain, Meteor Swarm, Dark Star, and Boulder.
The Mask Head is weak to Special attacks (especially Ice—but it's strong against Fire, Thunder, and Jump)
The Treasure Head is weak to Fire and strong against Thunder, and is weaker to Special attacks than physical. The Treasure Head will sometimes open up and pick a symbol at random. The poison bottle inflicts Poison on all characters. A ghost symbol inflicts Fear on all characters.
Keep using these strategies until you defeat Smithy. Congratulations! You won! Enjoy the ending!