Ferrari Secret Society Costs Its 29 Members $1.8 Million Each

Ferrari Secret Society Costs Its 29 Members $1.8 Million Each
2006-04-19 19:10 (New York)


By A. Craig Copetas
April 20 (Bloomberg) -- Michael Fux paid $1.8 million plus tax
to join the world's most select and secretive high-speed society.
There is no membership card. Instead, Fux, founder of U.S.
mattress maker Sleep Innovations Inc., walks into the garage of his
Miami home and awakens one of only 29 carbon-fiber Ferrari FXX
sports cars the Italian automaker recently delivered to a coterie
of ueberwealthy owners from Tennessee to Tokyo, known as the
Ferrari Client Test Driver Club.
``There's absolutely nothing street-legal about the FXX,'' Fux
hollers, his voice a whisper against the discharge of a 6,262 cubic
centimeter V12 engine that kicks out more than 800 horsepower at
8,500 rpm -- practically the same performance numbers that empower
the Formula 1 racers that Ferrari SpA in Maranello, Italy,
constructs for Michael Schumacher.
The FXX is about as subtle as an erupting volcano, so potent
that Fux says the U.S. Environmental Protection Agency's Office of
Air and Radiation monitors all FXX imports, slapping club members
with a $27,500 fine should the car enter the country without a
proper license.
``Once the FXX is legally in the U.S., it's up to state and
local law enforcement to ensure the vehicle is driven only on a
racetrack,'' says Dave Ryan, spokesman for the EPA's enforcement
division.
As for who's doing the driving, ``we don't reveal names,''
says M. Toscan Bennett, public relations director of Ferrari North
America Inc.

Club Members

For the 62-year-old Fux, the track is the only prudent place
to exercise the FXX alongside fellow clubbers, who include U.S.
automotive mega dealer Phil Bachman of Greeneville, Tennessee;
Florida flea-market baron Preston Henn; United Auto Group Inc.
Chief Executive Officer Roger Penske; and Lawrence Stroll, co-
chairman of A&G Group Ltd. and former co-chairman of Tommy Hilfiger
Corp.
And with speeds in excess of 240 miles (386 kilometers) per
hour and a gearbox that executes shifts in less than 100
milliseconds, the language of the ancient Mongol Empire perhaps
contains the only verb to express the action a novice experiences
behind the FXX wheel: ``temul,'' the look in the eye of a horse
that's racing where it wants to go, no matter what the rider wants.
``Even good guys look like they're sawing wood with their
hands in the FXX,'' says Le Mans winner Leo Hindery Jr., managing
partner in the New York-based buyout firm InterMedia Partners LLC.
``It's a display car for guys who want to spend 200 grand a year to
drive around a track in demonstration events.''

Can't Order One

Bruce Clarke, a track official at the Homestead Miami
Speedway, knows about the perils of demonstration. Thirty minutes
before Fux and seven other FXX owners make their inaugural run,
Clarke tells the group they can go as fast as they want and pass
whomever they want.
``I sure hope they keep their heads on straight,'' he
cautions. ``These cars are dangerous.''
The FXX isn't a prancing horse for Wall Street bonus babies to
saddle up. Ferrari currently manufactures five retail models and
the FXX isn't among them. ``You don't go into a Ferrari dealer and
order an FXX,'' explains Fux, who owns a dozen Ferraris.
``Maranello contacted us after conducting a long and private
vetting of customers.''
Client test-driver Henn reckons his membership car required
divine intervention.
``Ferrari's North American operation called to see if I was
interested in an FXX,'' says the 75-year-old Henn, who has raced at
Le Mans and owns 20 Ferraris. ``My nomination was reviewed by
Maranello and I was given to understand final approval came from
the pope.''

Cold Callers

Ferrari engineer and production director Giuseppe Petrotta,
says that more than 60 customers so far have cold-called the
company for membership in the Client Test Driver Club since 2004,
when his team began planning the project for vehicle delivery this
year.
``The FXX gives us the opportunity to test-drive new Ferraris
with our customers,'' Petrotta says while preparing Fux's red FXX
for the track. ``We must limit the number of owners to 29 because
including more would detract from the amount of service, assistance
and hospitality we can provide.''
Petrotta says client confidentiality is paramount.
``FXX owners are made aware of many Ferrari technical secrets
that our competition would like to be aware of,'' Petrotta
explains. ``Telemetry data from the FXX is priceless, and giving
customers access to the information is part of the program because
it allows them inside the development process for our future
cars.''

Five Mechanics

The FXX comes with a squad of five Ferrari factory mechanics
and personalized driving tips and training from Schumacher.
Standard equipment includes three gigantic metal trunks filled with
specialized helmets, fireproof racing suits, red racing sneakers, a
smorgasbord of purpose-built tools and a more than 300-page
instruction manuscript housed in an FXX carbon-fiber binder.
Henn says collectors of Ferrari ephemera are willing to pay
$10,000 for the codex. As for the car, ``I've already heard about
offers of $4 million,'' Henn says.
Fux says the greatest joy of the FXX is handing its keys over
to Jamie Camara and Ian Beltri, young race-car drivers less than
half his age and looking for a break on the professional circuit.
``If I can find somebody to drive it better than me and showcase
their talent for Ferrari, then that's the ultimate thrill,'' Fux
says.
``My first car was a beat-up 1950 Ford,'' recalls Fux, whose
current stable of 50 cars includes an Aston Martin Volante, a
Formula 1 Ferrari, a Saleen S7, a Ford GT and two Lamborghini
Murcielagos. His $1.4 million Bugatti Veyron is scheduled to arrive
in June.
``I swapped the Ford for a 1949 Plymouth with rotted floors,''
Fux says. ``The FXX is a much better investment.''

`About Macho'

Classic-car specialist Malcolm Barber, CEO of the U.S. unit of
Bonhams auction house in London, says the jury is still out on the
FXX. ``Squillionaires want the FXX to pump their adrenalin and it
will take a generation to see if the car does the same for their
investment portfolios,'' Barber explains.
``The FXX is about macho and nothing else,'' says Hollywood
film producer Mara Beth Sommers, who spends her weekends at the
track racing an F430 Spider against men in the Ferrari Challenge
Series.
Ferrari's Petrotta says any discussion of the FXX's free-
market worth is premature.
``An owner has the right to sell his car, but unless we
approve the sale, the new owner is not a member of the club,''
Petrotta says as the FXX fleet rumbles to life in the paddock.
``That means no assistance, no mechanics.''

The Pedigree

The partnership between the Ferrari unit of Fiat SpA and FXX
owners runs through 2007. The two-year agreement stipulates that
Ferrari will sanction seven FXX events a year: two each in North
America, Europe and Japan and with an annual grand finale in Italy.
``It's one hell of a public relations program for Ferrari and
we're paying for it,'' Henn says. ``Ferrari's people crank it up,
warm it up and wipe it down after we race. The FXX is a car for
someone who lives their life every day as if it's their last.''
FXX client manager and Ferrari mechanic Andrea Galletti
expects each car will clock about 3,500 kilometers over the term of
the contract. ``If owners want to drive the FXX on their own,''
Galletti adds, ``we will do everything we can to have a factory
team of engineers and mechanics on hand.''

`Over the Top'

Slipping into the driver's seat of his yellow FXX, Bachman
says he intends to permanently garage the Ferrari in Maranello in
order to sustain its Italian provenance. ``Driving this at
Homestead is great, but I want to maintain its European pedigree
and keep it on European tracks,'' the 68-year-old car dealer says
over the bawl of eight FXXs revving their engines. ``I sell
Pontiacs to pay for Ferraris,'' Bachman shouts, ``and this one is
over the top with power.''
In pole position, Fux gives a thumbs-up and blasts off around
the 2.21-mile track. Nausea sets in after the fourth lap and he
returns to the pit, his white beard matted with sweat, a top speed
of 210 mph on the telemetry system and a mischievous smile on his
face.
``I'm a little boy,'' Fux says, the words streaming from his
cracked lips. ``Wild, just wild. One hundred and sixty miles per
hour is slow in this car. There's someone out there doing 240,'' he
continues between gulps of pink lemonade. ``The FXX is it, the best
of all my cars. The only thing wrong with it is that I can't drive
it on the street.''

--Editor: Ahearn (djh).

Story illustration: See {F IM <Equity> CNP00094090102 <GO>} for
an overview of Fiat's performance. For Fiat's management, see
{F IM <Equity> MGMT <GO>}. See {BEAUTOS <Index> GP <GO>}for a
graph of European automotive stocks' performance. Click
http://www.ferrari.it for Ferrari's Web site.

To contact the reporter on this story:
A. Craig Copetas in Paris at (33) (1) 4910-9920 or
[email protected].

To contact the editor responsible for this story:
Bill Ahearn at (1) 212-617-4197 or [email protected]

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