Ownership of Alfa Romeo
Through its various iterations as an automobile manufacturer Alfa Romeo has managed to survive over a century of the tumultuous car market through a variety of owners. Originally beginning as SAID, Societa Anonima Italiana Darracq in 1906, founded by French entrepreneur Alexandre Darracq the company was unsuccessful in Italy and by 1910 was nearly bankrupt. Rescued by Ugo Stella, who would become the company’s Managing Director and other Italian investors, they acquired the shares of the Italian part of the company and renamed it Anonima Lombarda Fabbrica Automobili, or A.L.F.A. Its main competitors, Fiat and Lancia were eleven and three years old, respectively when A.L.F.A would begin its story as one of Italy’s great car marques.
The first change in ownership occurred when financial difficulty struck due to the consequences of World War One, ceasing A.L.F.A’s involvement in motor sport and private car manufacture in Italy. Nicola Romeo would come to the aide of A.L.F.A and move the company into the production of war time equipment. He would be the company’s new Managing Director and would be responsible for the brand’s current name, drawing from both old and new, it would become Alfa Romeo. After the war came to an end the company was once again in strife. The demand for war time supplies had dwindled considerably and Alfa Romeo was forced to enter new markets such as manufacturing drills, tractors and more rolling stock. However, automobiles were not forgotten about, in 1920 the first car bearing the company’s new name was produced. In 1928 Nicola Romeo left the company after it went broke when the defence contracts ended after the war.
At the start of the 1930’s the worldwide depression had hit Italy. Its industries were declining and an industry bailout by the banks began. However, many of these banks became bankrupt, leading to the Italian government purchasing the shares of these companies and taking control. In 1933 the Industrial Reconstruction Institute (IRI) was formed to take over and subsidise the industrial sector. Alfa Romeo had struggled after the war and the bank of one of its major shareholders had collapsed. IRI intervened and in 1933 Mr Gobbato became Managing Director of the company and was tasked with rationalising and modernising the company. In 1948 the IRI established Finmeccanica, which was responsible for the automotive, aerospace and ship building industries. Responsible for Alfa Romeo, they became one of Finmeccanica’s leading divisions during the 1960’s with a total of 50 percent of the groups sales (1). However, in the 1970’s financial difficulties brought on by rising fuel costs and another economic crisis, Finmeccanica was forced to rethink its strategy. Alfa Romeo was not competitive enough in the international market and could not compete effectively.
Initially, Ford was interested in purchasing Alfa Romeo, acquiring part of the company, restructuring and increasing its stake in the company over time. Fiat, then offered to purchase the entire company and offer security to Italian workers. Ford was unwilling to match this offer and Alfa Romeo was keen to remain Italian. Therefore, in November 1986 ownership was transferred once again, this time to Fiat, one of Alfa Romeo’s initial competitors.
Since 1986 Alfa Romeo has remained under Fiat’s control. Although, there have been some rumours of a sale to Volkswagen (VW CEO has expressed interest multiple times) Fiat CEO Sergio Marchionne has been adamant that they will stay in control. With Sergio’s plan for Alfa Romeo being released in April, we will soon have a better idea about the future of the great Italian car manufacturer. We can already speculate as to what this will include, see my ‘Alfa Romeo Future’ post for more details https://auto2014.wordpress.com/2014/01/24/future-of-alfa-romeo/