Ferrari is going broke!

I've got an uncle who was a nat'l sales exec for Revell, while they were still owned by Binney & Smith, the Crayola company. Revell was the title sponsor of the '99 NHRA "Revell Nationals" race at the Texas Motorplex in Ennis. (Tony won the Championship that year.) He invited me to come out to the race and hang out in the title sponsor suite. The guy who was supposed to dress up as the Crayon and walk around the race never showed, so I donned the inflatable suit for a photo op for Revell and T. Schumacher's team. The suit was a thin nylon material, held inflated by two small electric fans running off a battery, pushing air into the suit to keep it inflated. We hung around the pits for a while and when the team was ready to test fire the engine, we were allowed to stay in the pits. Cool! Until the nitromethane exhaust fumes were sucked into my costume by the electric fans, of course. Now I was in my own portable gas chamber. I took a breath and was choked by the exhaust. I ran into the race trailer, tore off the costume, and coughed up a lung.

Hence the inscription Tony made on the photo, "I heard your[sic] addicted to nitro fumes."

 

Ferrari and Maserati are NOT involved in the put option. They are NOT part of Fiat Auto. They are a SEPERATE division of Fiat SpA. The put option ONLY relates to Fiat Auto, NOT to any of the other divisions of Fiat SpA.

Fiat SpA is not in great shape, but they are OK. It's the Fiat Auto division that is on the edge on bankruptcy.

The F1 racing team spends nearly 300 million a year. A substantial percentage of that cost is covered by sponsors. The production of street cars only goes to partially cover the cost. Ferrari really only exists to support the whims of a number of wealthy people who want to go racing.

 

I understand what you are saying, but I do not think Ferrari has a goal of 10 billion anytime soon. I think you can understand what I am saying as well.

 

Ok, forum buddy, you seem to have ME confused with other people now: I did not say ONE negative thing about the Gallardo or Lamborghini in general. I, in fact, sympathized with you in my initial post. However, not unexpectedly, you jumped the gun and continually have replied in a fanatical, defensive manner.
And yes, unfortunately and disappointingly, you have promoted false statements including, but not limited to, (1) Lamborghini's raising the HP on the standard Gallardo 2 years into production being a good thing in all respects, (2) Ferrari should do the same thing, and in essense already has with the 360CS (3) Ferrari's have waiting lists only because they have good marketing, (4) Depreciation does not, and should not, matter to anyone anywhere in the world who is able to purchase a Gallardo or any other high-end car for that matter.
If indeed, you truly view all of the above as truth, so be it, but that is completely bizarre and unrealistic.

Regardless, I will accept your initial apology for disappointing me, and I will concurrently make clear that I hope I have not offended you, as that was never my point. I just wanted to diffuse some general misperceptions. If you have taken it personally, I am sorry.

And, good luck with that Murci.

 

Once again, your are confusing the word "fact" with the word "opinion". Your itemized list contains my opinions.

Thank you, and good luck with your car.

 

I'm not sure how Lambo's got into this thread. Anyway - moving right along....
Here's the short story re the Fiat Auto "put" to GM. AT the current valuation of Fiat Auto it appears that if the put were to be excerised by GM they would in fact receive money from Fiat Spa in order to maintain the correct stock ratios originally used in the deal. Even if GM was to receive money and all of Fiat Auto, it would not be worthwhile. They would inherit a money losing operation, worthless plant & equipment, underfunded pension obligations, awful union/employee problems and no way out.
Fiat Spa, on the other hand can't wait to offload Fiat Auto in order to rid itself of the above problems going forward, even if it has to put up some cash (around $80 million at current valuations). There is no $2 billion payout from GM in the deal. That would have occured if both Fiat Auto and GM had maintained their businesses at the same level as when the deal was first struck.

Re Ferrari Maserati Group, the idea has always been to IPO the group for around 2.5 Billion Euros, but that ain't gonna happen until Maserati becomes at least a 10,000 unit per year manufacturer. The financing deal with Mediobanca, who syndicated a deal for 38% of the FMG is that they would have to sell most of the shares back to Fiat Spa in the event of a IPO, but as I said earlier that is unlikely for a while. Info from the horses mouth, high up at Mediobanca in Milan.

 

I am not trying to offend anyone here, because I have my Ferrari and would never give it up. I also would never feel my car was the same if Ferrari started selling them to every kid on the block. It just everyone was stating the Ferrari makes so much money and could probably support Fiat. When in fact, Ferrari is struggling by, compared to other cars they are going to compete against. I know people are going to say Toyotas and Ferrari are totally different animals. BUT cars are cars, they are both in the market to make money and Ferrari just doesn't have enough rich people in the world to compete with other brands finacially. Do you think when people go to the race track, they are going to say "Sorry Toyota, this is a Ferrari you can't race in our class"? Don't forget the profit that is made from selling cars is also some of the money used for racing and to pay investors. How can you say Ferrari has a chance if Ferrari is going to compete in racing and only has 46 mil to work with, and Toyota approaching the line has 10 billion to support its powerplant. I am suprised that Ferrari still beats these people much less has any money to give its sharholders if they got any at all last year.

 

What is Magnetti Marelli? I see the name, and I saw it on the FIAT graph on page 1. Thanks for a reply.

 

Ferrari is also tapping a new stream of revenue they are going after aggressively, licensing. They are using the Ferrari logo and colors on surfboards, computers, underwear, ect.

 

I love how everyone thinks that god forbid GM were to have control of ferrari that all hell would break loose and ferrari tradition would be over. NOt saying its happening just the outcry is somewhat funny. There are plenty of car enthusiasts at GM, it wouldnt mean they would ruin the marque. but who knows.

 

I'm not sure I follow what you're saying. Ferrari has much more than 46 mil to work with for racing. That 46 mil profit is on top of all costs, including the F1 program, which is estimated at 300 mil plus. As for Ferrari's competitiveness, you have been following F1 right? Does the name Schumacher ring a bell?

The fact that Ferrari is making a profit given the huge expenses of R&D and the F1 program, they are obviously doing things right from a business perspective.

 

GM doesn't have the guts to build the Cadillac Sixteen, the coolest sedan they have come out with since WW II. When I see them rolling a few hundred of those off the line, I'll agree that the enthusiasts are in control.

Remember these are the same folks who discontinued the Camaro, after years of no marketing support.

 

what does SPA exactly stand for in Ferrari SPA. ?

 

Società per Azioni or Limited share company. Basically a corporate definition, i.e it is a company whose liability is legally limited to itself rather than the owner/shareholders

 

Fiat Auto sold off 51% of their car finance sub-division some time ago, and that also changes the original deal...but I'm not a lawyer, so I don't know if that, in and of itself, cancels the put option.

In effect, GM has already screwed themself over the Fiat Auto deal, so if they got money from Fiat, it might be enough. Certainly the plants and equipment are worth something; although I don't know if it is enough to outweigh the obligations.

There is also the issue of the Alfa Museum. Does anyone know if it is owned by Fiat Auto, and would be included in the deal, or is it a seperate division or part of Fiat Spa, and wouldn't be included...

 

Maybe Fiat believes it can improve financially if they decide to produce cars in Iran.

Here is the story cut from the Detroit Free Press, done by associated press:


Fiat announces deal to produce and sell its cars in Iran

Wednesday, January 26, 2005

ASSOCIATED PRESS

ROME -- Fiat Auto SpA said Wednesday it has signed a deal to manufacture and sell vehicles in Iran, with production to start in the latter half of this year.

The Turin-based manufacturer said the accord was signed in Tehran by Fiat Auto CEO Herbert Demel and Manouchehr Gharavi, head of the Pars Industrial Development Foundation (PIDF) Co.

Among the cars to be manufactured at the PIDF plant in Iran will be the Palio, Siena and Palio Weekend Adventure models, Fiat said.

It added that production would also include models that can use methane or oil.

Fiat said the aim is to produce as many as 250,000 vehicles a year when full production capacity is reached.

The announcement comes as Fiat SpA and General Motors Corp. ponder an option the Italian company has to force GM to buy its unprofitable auto unit.

The deal with Iran "is important because it forms part of our strategy for strengthening Fiat Auto's presence in markets with a high growth potential in the automobile sector," Fiat quoted Demel as saying during the signing ceremony.

Some 800,000 vehicles were sold in Iran last year, and industry watchers expect the figure to rise to 1.2 million within five years.

 

has anyone else noticed all of this guys posts are full of crap? you haven't stated a single fact. all your posts are "well, i think" or "i don't know, but". who is interested in your pointless musings? do some research and come back here with some well thought out posts that are backed up by facts. This is typical "How can you say Ferrari has a chance if Ferrari is going to compete in racing and only has 46 mil to work with". pure ignorance of the facts.

 

You might be beating a dead horse. This thread got resurrected as a reference for another thread. Muteki hasn't posted since 1-05 and hasn't been on since 9-05 .

 

Harm, no. But Lambo's are totally different now, and Audi actually had good things to contribute.

 

With the engines made in Hungary and the chassis and bodies in Germany, by Volkswagen-Audi, how are they still Lamborghini's?

Fine Volkswagens they are, but they are Lamborghinis in name alone.

 

The new Lambos suck! No spirit, no soul, no heritage. The last real Lambo was the Countach.