After the excitement of Lewis Hamilton’s brilliant victory on Sunday, life was busy yesterday. Much of Sunday night night and Monday morning was spent writing in my pokey hotel room and then, after minimal snoozing, a typically unsatisfying Italian breakfast (they are famous for exquisite pasta and pizzas but their breakfasts probably explain why the the British were able to build a bigger empire in colonial days). Then after a suitable number of “ciao” “arrivederci” and “L’anno prossimo”, I was on the road, heading north as the Milan commuters came at me in ever-increasing numbers, heading south. At the border in Como no one paid anyone any intention and I was in Switzerland and heading up to Lugano and the St Gotthard. It wasn’t long before the sleepless night began to take its toll and so there were a series of power nap pit stops before I even reached the tunnel. The biggest cause of deaths on Europe’s motorways is people falling asleep at the wheel and I prefer to live a nice long life and not go out buried in the crash barriers on an autostrada… I hit the French border (not literally) with all the planets aligned; the tank was empty, I needed food and it was lunchtime. I had a picnic in a rest area somewhere in Peugeot Land and made Paris by dinner time, which was perfect. It was a lovely day across France and Switzerland and it does the soul good to appreciate the beauty of the earth from time to time.
I pondered many things as one does on a long trip on your own and marvelled at those who had tried to believe that Nico Rosberg overshooting the chicane twice was some kind of conspiracy. It was irrelevant. The way Lewis Hamilton drove on Sunday he would have won no matter what. The only response to Rosberg’s behaviour at Spa was a good thrashing, just to remind him that more often than not, natural talent trumps cynicism in the game of life.
Another subject upon which I ruminated was Luca Montezemolo (the di by the way is only used with the full family name “Cordero di Montezemolo”). The F1 world is all a-twitter over his future and many are confused about the story. The answer, I believe, lies in the oft-overlooked fact that F1 is not the most important thing in the world. There is a Ferrari board meeting coming up in the next few days and this is likely to shed a more realistic light on the future of the Maranello company. It is extremely unlikely that things will remain unchanged, not because Ferrari is doing anything wrong (except perhaps its Formula 1 programme) but simply because it is a part of a bigger entity and the strategy of the group as a whole may differ considerably to the path that Ferrari wants to take. Once Montezemolo did have the power to sway Fiat policy, but in recent times things have changed. Fiat CEO Sergio Marchionne has worked wonders to try to turn Fiat into a real global player in the automotive industry, capable of battling with GM, Volkswagen, Toyota and Ford. To achieve this, he grabbed control of Chrysler. It was a good deal but it left Fiat with a lot debt, which is not what it needs. What is required now is money to use to expand into new markets. Six weeks ago Fiat’s shareholders agreed to move The company’s headquarters from Turin to Amsterdam, although for tax purposes the company will be based in London and its primary stock market listing will be on the New York Stock Exchange. This has been done in order to give Fiat Chrysler the easiest possible access to capital. Ten years ago, for example, Fiat had 125,000 employees in Italy, working in nearly 70 different factories. Today, after the merger, there are 220,000 FCA employees around the world, but only 60,000 of them are in Italy and there are just six assembly plants left, these are running at only 40 percent capacity and Fiat is again talking about getting tough with the Italian unions in order to free the business of its troublesome Italian roots, while at the same time expanding rapidly in the vital international markets. Marchionne is the boss and the firm does what he wants it to do. And this has meant a certain amount of friction with Montezemolo, the modern father of Ferrari, who wants Ferrari to do what he wants, not what a higher authority tells it to do. It is harder too because once Montezemolo was Marchionne’s boss and is no longer.
Ferrari is an amazingly successful business. It is so successful in fact that the board has taken the decision not to produce more cars but rather to restrict production and allow the prices to rise because of increased demand and limited supply. Ferrari is now turning over something in the region of $2.6 billion a year, with a pre-tax profit in the region of $490 million. The company also has cash reserves of $1.8 billion. Based on these numbers, it is clear that an IPO of Ferrari, with Fiat remaining in control, could raise a large chunk of the money required by Fiat to repay the current debt. Montezemolo has long been opposed to an IPO because he does not want to weaken Ferrari and so if there is to be a stock market flotation, then his wishes must be overruled, even if he is still a respected figure. Removing him requires the right kind of handling, making it appear that he is moving onward and upward. Keeping him at Ferrari is not an option because that would be a humiliation within the industry. So if Ferrari IPOs, Montezemolo by definition must depart. The chairman role at Alitalia is a perfect vehicle for Luca to drive away from Ferrari in. Ferrari will likely be listed with Fiat in New York and if one is dealing with US investors, who better to lead the firm than a man they know: the former head of Ferrari North America. A Mr Mattiacci. This would explain the illogical decision to put him in charge of the F1 team a few months ago…
Marco is currently formulating plans to return Ferrari to winning ways in F1 in the future, but he could quite easily move up into the CEO role.
So the big question in the F1 parish is who is the next boss of Gestione Sportiva because Mattiacci may not be much longer in the job.
“Pronto, pronto. Can I speak to Ross please?”