‘The Great Ferrari Walkout’ Employee Mutiny Almost Killed Enzo’s Company

‘The Great Ferrari Walkout’ Employee Mutiny Almost Killed Enzo’s Company

$FRRI, $FCAU, $F

From its creation as a sports car manufacturer in Y 1947, and until Enzo Ferrari passed away in Y 1988, Ferrari was known as an almost totalitarian organization, with Enzo running the company like a dictator.

This is likely the Key reason behind Ferrari’s (NYSE:FRRI) success both on the Track and on the Road, but on more than one occasion it weathered some heavy storms.

One of the most important ones was the birth of Lamborghini, another resulted in Scuderia Ferrari getting beaten by Ford (NYSE:F) at Le Mans, for 4 years running.

The biggest Ferrari scandal in history almost ended in the distruction of the company, especially since it came at a very difficult time for the The Scuderia. This was the early ’60’s, and Enzo had amassed a serious number of arch-rivals that stemmed from the common desire to best both his company’s fantastic sports cars and himself as a tyrannic business ruler.

Some say it was a mutiny among Ferrari’s best engineers, but the fact is that it started mainly because Enzo had a very basic method of dealing with people that he did not see eye-to-eye with.

In English it goes like this, “if you don’t like it here or what I’m doing, you’re free to do it your own way, but somewhere else.”

This is pretty much how he “convinced” Ferruccio Lamborghini to start a competing sports car company, and Ford to best Ferrari at Le Mans from Y’s 1966 – 1969. It was his stubbornness that almost cost him his company on more than one occasion, the biggest in Y 1961.

What became known as “The Great Ferrari Walkout” just about every opponent to Enzo’s ways was either laid off or left on his own accord in a matter of days, leaving the carmaker without some of its most successful engineers and designers.

This tension happened over several years at Ferrari, and came to a head in Y 1961.

According to the lore that I heard in the late ’60’s, the biggest dispute regarded Laura’s, Enzo’s wife, increased involvement in company affairs in the years preceding the walkout.

Her intervention in how Ferrari was being run did not go well with one of the car maker’s Sales Managers, Girolamo Gardini, who frequently argued with Enzo over this issue.

Over time, the discussions became so heated that Mr. Gardini simply cornered Enzo and threatened to leave the company if Laura was not taken out of the Ferrari senior management group. Enzo refused to comply with such a demand from an employe and promptly laid off Mr. Gardini, one of the Key people responsible for its success.

Mr. Gardini was not the only one against Laura’s involvement in how Ferrari operated, especially when it came to her bad-mouthing certain figures in the company, so his thoughts were largely mirrored by a number of other critical employees as well.

Ferrari development chief Giotto Bizzarrini, chief engineer Carlo Chiti, Scuderia Ferrari manager Romolo Tavoni and a number of 5 other Key people backed Mr. Gardini. They went as far as sending a group-signed letter to complain about Laura’s meddling with The Scuderia’s business and operations.

Following the news of Mr. Gardini’s dismissal they all left the company in October 1961, leaving Ferrari without some of its Key executives and with upcoming sports car projects in limbo.

Some say that they were actually all sacked, while others say that it was a common decision made among themselves. Either way, that is less important than the potential consequences of the timing of this happening.

The walkoff came at a difficult time for Ferrari, whose Motorsport division was struggling to cope with an increasing number of track-related tragedies. Yet Ferrari racers and sports cars from that era are the most expensive in the world, selling in the 10’s of millions of dollars.

A 1962 250GTO like the one pictured above is rumored to have sold privately for about $55-M.

A Italian magazine wrote that the factory was nothing because “it was built on dead men.”

Ferrari Grand Prix driver Eugenio Castellotti had been killed in an accident ate Modena Autodromo circuit in Y 1957, while Fon de Portago had crashed and died not even a month later in the last and bloodiest Mille Miglia race, taking several spectators with him.

The tragedies Ferrari Motorsport continued in Y 1958, when Luigi Musso was killed at the French Grand Prix in Reims, while Peter Collins died on the Nurburgring, all in the span of just a few weeks.

Even though The Scuderia secured both the World Championship of Drivers and the International Cup for F1 Manufacturers titles in Y 961, that thanks to the genius of Phil Hill and the speed of the distinctively designed Ferrari 156 F1 “Sharknose” – the 2 triumphs were overshadowed by Wolfgang v.Trips’ death at Monza, a crash that also took the lives of 15 spectators.

The grim frame caused by the death count in racing, the arguments with Ferruccio Lamborghini and the Great Walkout, and culminating with the beating it got from Ford at Le Mans almost forced Enzo Ferrari to close shop in the 1960’s.

Arguably, the engineers and designers that left caused the biggest amount of damage to the company, since it was more than just a PR blow and an actual loss of talent from Maranello’s small family of employees. Not to mention that almost immediately after leaving Ferrari, Giotto Bizzarrini, Carlo Chiti and Romolo Tavoni teamed up to form ATS (Automobili Turismo e Sport), a soon-to-be arch-enemy of Ferrari both on the road and on the track, thanks to funding from Count Giovanni Volpi

Note: ATS failed, they made 7 cars if I remember correctly. During this time the Count was still driving Ferrari’s, I know that because I bought his 275GTB/2 in Y 1968.

Happily, these events did not put an end to Enzo’s dream of racing, instead it empowered him to bounce back and become even more successful.

That being the case, we have to thank all of Enzo’s enemies over the years, since they are partly responsible for the Prancing Horse’s evolution to the highest brand status in the World.

Ferrari is a unit of Fiat Chrysler Automobiles, NV (NYSE:FCAU) and is set to IPO on the NYSE this month with the ticker “FRRI” at an valuation of $11.2-B.

Stay tuned…

Paul Ebeling

HeffX-LTN

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