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  #1  
Old 10-17-2011, 09:21 AM
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Ferrari Bankruptcy

I'd love to hear from the experts historians in this forum ;

What was this passage of history like ,
what was the context ?
what reasons led Enzo to the SALE of his company ?

details of the Henry Ford offer and furthermore ...

who took over , when and how ?

what was the last car of Enzo's reign ?
what role played Il Commendatore afterwards ?

etc.

I'm sure most experts in here have different details of this history
It would be rather interesting to put all pieces together ...

Many Thanks in Advance
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  #2  
Old 10-17-2011, 10:22 AM
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The sale to Fiat was not while in a bankruptcy. Seemingly Ferrari had always been underfunded but the fight with Ford, after the non-sale, in all the racing classes (F1, prototypes, GT, F2) was proving to be a major strain on the available finances.

The book by Franco Gozzi "Memoirs of Ferrari's Lieutenant" has good information on the non-sale to Ford and the sale to Fiat.

Your question on "last Ferrari" can usually be broken into 2 categories: last designed pre-Fiat and last in his lifetime. Many consider the Daytona as the last of the pre-Fiat (Fiat influenced) designs.

Jeff
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Old 10-17-2011, 12:46 PM
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This is how I know the story - if people have corrections please don't hold back!

Ferrari, the company, was founded for only 1 reason: to race, and to win. At the same time, Ferrari realised that success on the race track would enable him to sell cars based on his racers for a premium, and that he could use the profits of that to fund his racing.

By the early 1960's, racing had become a lot more expensive due to increased levels of professionalism, but also because Ferrari was racing so many different classes. To keep reigning supreme, Ferrari needed more money, which is why the Ford deal came close to reality in 1963. However, Ford wanted to take control of the Ferrari road cars away from Enzo, and he did not like the idea of having cars bearing his name that he could not have the ultimate say over. Apparently he found this out quite late in the process, but it was enough for him to cancel the deal. Henry Ford wasn't amused and that is how the GT40 programme was born to defeat Ferrari at LeMans (where it hurt: in racing).

Still needing funding, Enzo started looking around in Italy and found a partner in Agnelli, chairman of FIAT. FIAT bought a minority stake in 1965, I think 20%. Four years later, Enzo sold the majority in his company to FIAT but under the strict rule that he would be in full control of the company. This always remained the case. I do not believe that any Ferrari model was ever produced in his lifetime that Enzo did not approve of. He was far too much a cantankerous character to allow that. But FIAT certainly influenced him, and I believe the Dino programme was the result of FIAT's pressure to produce more volume Ferrari's. By producing them under his son's name rather than the name that was legend in racing, he created a link to the race cars but at the same time Ferrari owners could still distance themselves from the cheaper models and the status quo for the Ferrari name remained.


Onno
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Old 10-17-2011, 12:58 PM
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I believe that the Fiat ownership deal was 51% of production cars and 49% of the racing side. Further to this was that Enzo did not have much concern on the loss of real control of the production side (it was a means of providing the money to achieving his real end concern of racing).

The crucial part in the collapse of the Ford deal was that Enzo would not have a free hand on the racing side. This especially concerned the need to establish and have Ford approval of the budgets. Enzo, allegedly, also had issues that Ford business unit people and attorneys came to do the deal instead of Henry II himself.

There have been contentions that some of the dancing with Ford was also to get Angelli to step in and save Ferrari from the Americans.

Jeff
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Old 10-17-2011, 01:07 PM
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But FIAT certainly influenced him, and I believe the Dino programme was the result of FIAT's pressure to produce more volume Ferrari's. By producing them under his son's name rather than the name that was legend in racing

Onno
This is not correct. Enzo Ferrari realized quite early that he needed higher production numbers to fund his racing program. As early as the late fifties. I wrote an article about the Fiat Dinos a few years back. Here's the part about Enzo setting up a street car production line:

Thinking ahead
Enzo Ferrari is often described as somewhat conservative, especially when it came down to introducing new technologies like disk brakes and putting the engine in the rear. But thereís no question about his strong business sense. It seems that Ferrari was well aware that in order to keep his company alive and to keep racing, he also had to sell cars. Indeed very early on in his career as race car maker, he sold his obsolete race cars to wealthy customers. And although many quote him saying that building and selling street cars was a necessary evil to keep racing, he was clever enough to understand the vital importance of this.

Enzoís company SEFAC (Societa Esercizio Fabbriche Automobili e Corse) was totally geared to making race cars, as the name implies. The road car production line was secondary to this and it showed in the production numbers. Ferrari was a very small company. Only when Pinin Farina entered the frame production figures started to go up, but still nothing like those of other makes like Alfa Romeo and Fiat.

It seems that Enzo Ferrari recognized this. He saw what happened around him in the automobile industry, especially in Italy. After the war the mobility of the masses came into full swing, most notably with companies like Fiat and their little 500s. He was also very impressed by the British Mini that was introduced in 1959. It didnít take long before Ferrari came up with his own plans for a small displacement car that would be relatively mass produced.

Brand awareness
It seems that Ferrari was fully aware of the possible bad reflections that a mass produced, small displacement car could have on his core business. Even though Ferrari had built all kinds of engines and with all sorts of displacements, the cornerstone of his brand by the late fifties/early sixties was the big three liter V12. But as said he was no stranger to small displacement engines. His very first car, the 125, was only 1.5 liters, albeit a V12 (imagine the size of one cylinder, itís tiny!) And his very first championship winning monoposto was the 500 F2, with an inline four engine.
Nevertheless Ferrari began to unfold his plans for a small Ferrari in great secrecy so as to avoid any clear links to SEFAC.

Not a great start
Ferrariís first study in 1959 was later nicknamed La Ferrarina. It was officially called the Tipo 854 and was built on a chassis borrowed from the Fiat Coupe 1100. The body was designed by Pinin Farina and it looked like a small version of the Ferrari 250 GT coupe, also penned by Pinin Farina. The engine displacement started with 850cc but by 1960 it had grown into a little over 1000cc.
Even though the Ferrarina was Enzoís idea he didnít want to produce it himself. Mainly because his company wasnít equipped for mass production but also, as said before, because he wanted to avoid any links with his own big V12 engined creations.
However it took an unexpected long time to find a company who would buy the license to build the Ferrarina.
The first real attempt for serious production came with the ASA 1000 with a pretty body designed by Bertone. As the name implies it had a 1.000cc engine and ASA stood for Autocostruzioni Societa per Azioni. This company was founded by Oronzio de Nora, a wealthy oil and chemicals industrialist. His son Nicolo ran the car business. Enzo Ferrari relied on Nicolo de Nora but it gradually became apparent that de Nora had no experience in the car industry. Two years after the first introduction of the ASA 1000 there still wasnít anything like a series production going on. De Nora was still looking for a company to build the bodies. He finally got a deal with Ellena, who built somewhere between 100 and 120 ASA 1000s between 1964 and 1966.
Due to circumstances outside Enzo Ferrariís powers, the ASA company shut its doors in 1967. The idea behind the project was healthy but bad management ruined any chances of a prolonged success.

Third time lucky
The second attempt didnít work out either. It was the Innocenti 186 GT, of which only a few prototypes were built between 1962 and 1964 (so in the same period when the ASA was conceived). Again it wasnít Ferrariís fault that mass production didnít materialize. Innocenti had a contract with British Leyland to built and sell Minis under license in Italy. BL didnít want an in-house competitor so the project died before it even started.
But in 1965 Ferrari finally got his break when Fiat stepped into the frame. Fiat too was aware of the Innocenti situation and also didnít want a competitor on the Italian market, where they already had to deal with Alfa Romeo. So what better way than to join forces with Ferrari and pull the idea of a small but powerful car into their portfolio.
For Ferrari this was the big break. Not only had he a formidable partner in giant Fiat to realise the mass production, it also meant he would be able to homologate the Dino engine for the new regulations in the F2 race category, that would go into effect in 1967. Ferrari would have his engine ready well ahead of the competition.
Getting Fiat onboard also meant that the design stage went full steam and indeed the Fiat Dino spider by Pininfarina was presented to the world at the Turin show in 1966.
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Old 10-18-2011, 03:47 PM
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Some other timeline issues:

He reorganized with SEFAC in 1960 to improve auto production.

Fiat was giving some financial assistance by 1963.

Many do believe the Ford dance was to get Fiat to step up.

The dino deal was a way to get the engine homologated for racing. They could not build enough cars, and the head of Webber talked to Fiat about it. They came in with the idea of each building a Dino branded car and helped set up the production line. Fiat loaned production employee assistance as early as 1966.

He kept racing, but Fiat took over day to day car production. He was still President of the company overall until he stepped aside in 1977. He led a 3 man board that included a Fiat rep and the Webber CEO.
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  #7  
Old 10-18-2011, 05:35 PM
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Interesting! Thanks for the insights Jeff, Peter and Chris.


Onno

Last edited by JazzyO; 10-18-2011 at 05:36 PM.
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  #8  
Old 10-18-2011, 06:00 PM
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However, Ford wanted to take control of the Ferrari road cars away from Enzo, and he did not like the idea of having cars bearing his name that he could not have the ultimate say over. Apparently he found this out quite late in the process, but it was enough for him to cancel the deal.
As I have understood the story the dealbreaker was that he would remain in charge of the competition department (the Scuderia) and that would make sense, since mr Ferrari wasn't really interested in the roadcar division, other than for the purpose of funding the racing program.
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Old 10-19-2011, 05:27 AM
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As I have understood the story the dealbreaker was that he would remain in charge of the competition department (the Scuderia) and that would make sense, since mr Ferrari wasn't really interested in the roadcar division, other than for the purpose of funding the racing program.
Your comment doesn't make sense Marnix, unless you meant to type "would NOT remain in charge of the competition department".

I think it is a big mistake to think Enzo wasn't really interested in the road cars. It is a popular, regularly bandied notion, but I think it is an exaggeration. The only way that the road cars would supply enough funding was for them to be one the best cars available on the market. I am sure he maintained a careful watch on the cars personally to ensure that would happen. Countless are also the stories of him dealing directly with his road car customers (IF you were important enough). I think racing was his first love and focus but that doesn't mean that the road cars didn't mean anything to him. I believe anything that bore his name was very important to him.

As for the Ford deal - you may be right, I do not know exactly. What I do remember is that the story is that he was forced to give up something he wasn't expecting and cut the deal. However, the theory that it was all just a ruse to get into bed with FIAT, as suggested by Chris, also seems quite plausible.


Onno

Last edited by JazzyO; 10-19-2011 at 05:28 AM.
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Old 10-19-2011, 06:48 AM
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As a very slight aside question. There was a lot of surprise at the time of the Daytona's launch that it wasn't mid-engined.

Is there any evidence to support that the reason Ferrari delayed the mid engined car was due to lack of funds for the development process? The Daytona is clearly a development of earlier cars and development costs would have been much higher for the Boxer?
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Old 10-19-2011, 12:35 PM
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As a very slight aside question. There was a lot of surprise at the time of the Daytona's launch that it wasn't mid-engined.

Is there any evidence to support that the reason Ferrari delayed the mid engined car was due to lack of funds for the development process? The Daytona is clearly a development of earlier cars and development costs would have been much higher for the Boxer?
That shouldn't have been the problem. Pininfarina was trying to convince Ferrari to switch to the mid-engined lay-out as early as 1965, but somehow Enzo didn't play along with it. Pininfarina did several Ferrari show cars with the mid-engined lay-out but Ferrari only let him go ahead with the Dino production cars.
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Old 10-19-2011, 04:15 PM
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Your comment doesn't make sense Marnix, unless you meant to type "would NOT remain in charge of the competition department".
More or less, but I meant to paint the picture of mr Ferrari walking into the conferenceroom saying to the lawyers that mr Ford send ahead the he wants to remain in charge of the competitiond department and that this would be a dealbreaker for him. Anyway, the deal didn't go through when Ford couldn't and wouldn't agree with this demand, where as Fiat could and did.

Quote:
I think it is a big mistake to think Enzo wasn't really interested in the road cars. It is a popular, regularly bandied notion, but I think it is an exaggeration. The only way that the road cars would supply enough funding was for them to be one the best cars available on the market. I am sure he maintained a careful watch on the cars personally to ensure that would happen. Countless are also the stories of him dealing directly with his road car customers (IF you were important enough).
True, but mr Ferrari was, according to the stories, first and foremost a very pragmatic person. Knowing his roadcars were the life line of the Scuderia, it would only make sense that he would do everything in his power to make the roadcar division a succes. That doesn't mean he, as a person, was interested in his roadcars. And I suppose he wasn't. He rarely owned and/or drove them and I think he, being rather lowkey in his manners and focused on the world of racing, couldn't really relate to his clientele of the rich and famous.

He understood their importance for the continuation of his beloved Scuderia and acted upon it, but that was simply his pragmatic view. Having said that, it is said he was pragmatic towards his racing cars as well. They just needed to get the job done and when they became useless for the factory, they became worthless as well. Telling is his answer on the question of what is his favorite Ferrari: "The next one".

But since I have never got the chance to get to know mr Ferrari first hand, I can never be sure.

Last edited by GTE; 10-19-2011 at 04:18 PM.
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  #13  
Old 10-20-2011, 03:34 AM
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By the way, thank you for all the historical insight--great thread! I am a little confused by the statement that the last Enzo car was the Daytona, since the complete sale to Fiat, as defined by a previous post, happened a few years earlier. It make sense that cars are not developed overnight, and that the Daytona was likely developed prior to the Fiat sale, but produced after the sale. Is that what happened? Additionally, I have heard it said many times, and written, that the 1972 cars, were the last true Enzo cars. But, there seems to be a dispute as to whether a 364 GTC/4 is an Enzo Era car. Why? It was produced in 1972, clearly developed in the same timeline, and closely resembles it's more popular sister. So, why the controversy over GTC/4's not being Enzo cars?
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Old 10-20-2011, 08:18 AM
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By the way, thank you for all the historical insight--great thread! I am a little confused by the statement that the last Enzo car was the Daytona, since the complete sale to Fiat, as defined by a previous post, happened a few years earlier. It make sense that cars are not developed overnight, and that the Daytona was likely developed prior to the Fiat sale, but produced after the sale. Is that what happened? Additionally, I have heard it said many times, and written, that the 1972 cars, were the last true Enzo cars. But, there seems to be a dispute as to whether a 364 GTC/4 is an Enzo Era car. Why? It was produced in 1972, clearly developed in the same timeline, and closely resembles it's more popular sister. So, why the controversy over GTC/4's not being Enzo cars?
IMO Describing cars as Enzo era and post Enzo era is something that with never be clearly defined and is likely to change to suit the write up a dealer is doing on a Daytona, C4 or even 365GT4 2+2 that they have for sale at the time.

The only clear distinction I can see is that the Daytona was the last car with the old style engine designation (Tipo 251) and the C4 has a new style (F101).

Rather more subjectively the C4 feels a more modern car to me than the Daytona. If you want to waste a few minutes of your life you can read a comparision I wrote of my Daytona to my Dad's C4s on the link below

http://www.drivecult.com/features/si...rari-365gtc-4/
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Old 10-20-2011, 04:55 PM
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A great comparison of the two cars, and a really good read. Thx
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Old 10-21-2011, 12:22 PM
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A great comparison of the two cars, and a really good read. Thx
Thanks glad you liked it
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Old 11-01-2011, 10:27 AM
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Franco Gozzi's book and the Biography by Brock Yates are my sources. Enzo Ferrari's main goal was to win races. He got his kicks by winning, and did not really care much for the actual cars that carried his name, but from the fact that a poor un eudcated boy from Modena, was out beating the world at their own game. He was a very ruthless busienss man.

The Ford deal was all set... Ford Ferrari= road cars, Ferrari-Ford= racing cars. It's basically true that Ferrar did not care much for the road cars, but was interested in how they could expand his cachet of exclusivity, and bring in more $$$. The deal with Ford went south at the last min, when Ferrari was reading the deal documents, and found that as the leader of the racing division he would have to seek approval in detroit for expenditures greater than $200K, this was at a time when he was clearly spending $1 Million plus on racing. then as the attorney's began fruther digging it was clear that Ford was never going to simply give him the money he wanted for racing. - that was the insult to Ferrari. (remember he was born in the 19th century when your personal integrity and others respect was huge) To the Duce it was just an other busienss deal.

The tie up with FIAT was over a longer period of time, the Angellis were customers of Ferrari and Umberto I was friendly with Enzo. that is how the tie up came with doing a deal for the DINO engine. Ferrari needed more money to keep road car production going to meet safety standards not just in the USA but around the world, and he simply was using machines built pre WWII and did not have the manufacturing technology to expand or keep up. The deal was done that Ferrari kept 51% of the company - 41% ENZO - 10% Piero Lardi after 1978 ( dealth of Enzo's wife Laura) and 49% FIAT. When the deal was done in 1969, FIAT invested heavily in re equiping the factory, modernizing production techniques etc.. they also brought the Unions and the "red Menace" ... which caused Ferrari so many headaches in the early 70's. At the time, Enzo has supervisory role over road cars, - He was still President and Chariman of the company, but day to day running of the business was passed on to trusted associates... that FIAT agreed to as well. slowly as Ferrari's older associates died off or retired FIAT appointed their people to the board. Enzo's day to day involvement in Road car production by 1980 was minimal and really reduced to overseeing the company books and agreeing to budgets and personnel matters. Racing was his exclusive domain, where he continued to weild total control up to his last months of life. In 1988 his last year he even had an estraingement from Piero Lardi regarding John Barnard and the new atmo Ferrari's and it is thought that he died still not fully reconciled with his son. The F-40 is attributed to Enzo as his "last car" but really that was just an excuse to do development on a sports prototype racer that never really happend.

In the end, Ferrari lived by him self in 4 rooms in a 30 plus room house in down town Modena, was a recluse, and had more interest in the zamponi at Cavalino and gossip than really racing cars - he loved the machivellian antics of running the team and taking FIAT's money as well as those of sponsors and giving little back in return. He did however broker the one lasting agreement for F-1 - the Concord agreement by authroizing the construction of an Indy car, so show his will to leave F-1 and go racing elsewhere ( same time as F-40 Development.) While Enzo is a true legend, he was no saint.
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Old 11-01-2011, 11:34 AM
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Spirot,

I don't have the Brock Yates book but do remember when it came out. At the time it was derided by many as rumor mongering with too many anonymous assertions. In the interviews/rebuttal letters by Brock after publication he defended this by claiming that too many would not go on the record with their stories if they had their names used; fears of retribution.

Since time has passed and more information has come out how do you find the book? How much of the book deals with the earliest years? Does it do much with the company finances?

Jeff
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Old 11-01-2011, 01:34 PM
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I think the book is very good. Highly informative. if you can find a copy I encourage you to buy it!

Franco Gozzi's book is difficult becuase of the translation... but still a good read. backs up a lot of what Yates said.
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