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Ferrari's Ousted Chairman Was Right

Illustration for article titled Ferraris Ousted Chairman Was Right

I'm going to start this piece off with a confession: I don't really like Ferrari all that much.


That doesn't mean that I don't like Ferrari's individual products. Cars like the F40, F50, Testarossa, F355, F12 Berlinetta, the 458 Italia and many more are enough to get my blood pumping. You cannot deny that they make machines that are the stuff of dreams.

No, my beef is with Ferrari the company. I don't like the way they treat reporters and use ringers for tests. I don't like their arrogance, their holier-than-thou attitude about everything. I don't like that, despite the amazing style and performance they offer, that they seem to have no sense of fun or humor at all.


(And despite their troubles in recent years, I can't bring myself to cheer for their F1 team; it's too much like rooting for the Yankees, especially if you aren't from New York.)

In spite of this, I respect Ferrari immensely. I think they are an incredibly shrewd company, both in terms of how they develop their products and cultivate their image. They are said to be the most powerful brand in the world, and I can think of no example to counter that.

For the last two decades, the man behind all of this was Luca Cordero di Montezemolo, who quit last week after relations between him and Fiat Chrysler had Sergio Marchionne became untenable.

According to reports, the two men, both of whom have hard-charging leadership styles, had very different ideas about where Ferrari should go as it moves forward. Marchionne wanted to raise Ferrari's profile as a luxury brand, increase annual production and integrate it more into the Fiat Chrysler family, so as to better compete with Lamborghini of the Volkswagen Group.


Montezemolo did not, favoring keeping Ferrari's production exclusive at 7,000 cars annually, thus helping the brand to stay exclusive and coveted. A choice had to be made, and so one of these leaders had to go, and in the end it was Montezemolo.

The thing is, Montezemolo's approach was the right one. And the proof has been in the pudding.


Under his tenure, Ferrari achieved record profits and record sales. They produced what was, on the whole, the best lineups in their entire history. And as Jack Baruth noted in a TTAC column that ran yesterday, they widened the performance gap that existed between their cars and vastly cheaper competitors.

When Fiat Chrysler unveiled their five-year plan in May, the main thrust of the Ferrari presentation was very clear: "Ferrari is not for sale." No, nobody was asking if it was, but that's what you have to say when you're that valuable.


And on the racing side, while they've been struggling as of late, they achieved eight Formula One constructors' championships. F1 is an expensive venture, to be sure, and Ferrari's middling status there lately led to tremendous tension between Montezemolo and his boss at Fiat.

But besides trouble in the paddock, I don't know how you can look at Montezemolo's time at Ferrari as anything other than a massive success. They are profitable. Their cars are among the best in the world. They never watered themselves down with sedans or SUVs or electric cars. And marketers everywhere would kill to achieve their brand status: they are exclusive, expensive, premium, and synonymous with speed. Montezemolo ran a tight ship and it worked.


More than that, he understood Ferrari. This was a guy who came up as Enzo Ferrari's assistant in the 1970s, ran the Scuderia, oversaw racing for Fiat, and then took over after Enzo's death and rescued Ferrari from a financial pit. When he left, he said Ferrari was the most important thing in his life, and that was something you could believe. He loved the company and he knew what it was supposed to be.

Forget, for a second, all the negative baggage that sometimes goes with the brand, like the fires and the rich douchebag owners and even flagging F1 results lately. Ferrari, more than any other automaker, is tied closest to motorsports, to "Win on Sunday, sell on Monday," to the heart and soul of the auto industry. They are built around competing and winning.


Watch that video XCAR did on the F40 and racer John Pogson. That's what this brand is about, and that's what Montezemolo understood. As stupid as this sounds, Ferrari is truly special among automakers. It's what I love about them, even when I have moments where I don't like them.

And when you realize how valuable the brand is, and how much money it makes, all of a sudden that arrogance seems justified, even if it is frustrating.


For the moment, Marchionne takes his place as CEO, but another replacement could come. But will that person understand Ferrari as intimately as Montezemolo did? Will someone they lure away from BMW or Mercedes or some non-automotive luxury brand get it the way its old CEO got it?

Critics, and even Montezemolo himself, have said that the brand will become too "American." Marchionne has said they will indeed increase production to suit their growing wealthy client base.


I think it's far to early to say whether this strategy will be a success, or if Ferrari will indeed be ruined by bad ideas, poor product planning, and a general Fiat-ization that dilutes everything they once excelled at.

I just think that the way Montezemolo built up this company was hard to argue with, and I hope Marchionne doesn't lose sight of what Ferrari is supposed to be about.


Photo credit AP

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Goodbye old Ferrari, hello 458 Montana.

I for one welcome our new Ferrari minivan overlords.