Capitalism with Italian characteristics

While touring the Ferrari museum in Maranello earlier this year, your correspondent noted a plaque with a quote from Enzo Ferrari which read something like this: “It is often said that banks only lend money to those who don’t need it. We were lucky to find a local bank who would support our business when we had nothing.” The banker who lent the founder of Ferrari one million lire to start his company reputedly said “we only had the strength of his dream”. Tellingly, Banco S. Geminiano e San Prospero, now part of Gruppo Banca Popolare, is still Ferrari’s bank. A tour of Ferrari’s manufacturing plant nearby revealed more about the company’s culture. Enzo’s office was right by the plant’s gate, so he could watch people checking in and out. Today the plant is on the same spot where it started, but much enlarged to accommodate several newer buildings, including a wind tunnel. Engines are built by hand inside what is perhaps the core structure of the compound. What looks like a car wash pouring excess water is actually stress-testing finished cars for leaks. Next to it, there is a salon where buyers can customize their new cars with trimmings of all kinds. Every year, exactly 7,000 Ferraris are made to order. Once ordered, they take nine months to arrive; “just like a baby”, as our guide quipped. Though very popular models, like the new Ferrari California, can take up to two years. If the company’s business model sounds too traditional, consider a clue to how much Ferrari invests on innovation: the separate building dedicated to its famed racing team, the world’s leader in F1 victories, houses 600 of its 4,000 employees. A fighter jet from the Italian Air Force stands at the entrance to the company’s test course: it was won by Ferrari after racing against one of the company’s cars down the runway. The combination of tradition, devotion for quality and engineering prowess is so Italian that, in fact, it exists nowhere else.

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