Fiat Chrysler Automobiles plans to spin off sports car maker Ferrari into a separate company, a way to unlock value in the luxury brand and distinguish it from its mass-market parent.
By selling more Alfa Romeos as Dodge Darts. The widows of John and Horace Dodge sold their husbands' auto company to an investment bank in 1925 for a reported 2 billion inflation adjusted dollars. That bank sold it to Walter Chrysler in 1928. Fiat acquired Chrysler when it was bankrupt in 2008.The company said Wednesday that spinning off Ferrari was part of a plan to raise capital to support the new merged carmakers' expansion plans. Fiat Chrysler's five-year plan calls for increasing net income by five times by 2018.
The decision to break off Ferrari comes about two months after an awkward management transition at Ferrari that saw the longtime chairman Luca di Montezemolo resign after a public spat over strategy with Marchionne, who has taken over as chairman of Ferrari.
We say, ironically, because the Dodge brothers' fortune mostly came with their roll of the dice on Henry Ford, who'd frittered away millions of (again, inflation adjusted) dollars of Detroit investors, building a race car back at the turn on the 20th century.Marchionne has been vocal in his displeasure over Ferrari's long absence from the Formula One car racing winner's circle, and has pledged to get the team back to the top. The last time it won the driver's championship was in 2007.
Ford, with nowhere else to turn for financing for his passenger car--his original Model A--agreed to give 10% of the new Ford Motor Co to John and Horace Dodge in return for their machine shop turning out the parts that Ford would assemble into the first mass marketed automobile.
Now an Italianate Dodge wins out over another race car.