Saturday, February 26, 2011

Italy in Crisis. Are Americans and Cheap Europeans to Blame?

The flag is falling on the Italian town of Bologna.

Unless investors ( probably American ) come to the rescue of Bologna not much will be left. What they need is American style marketing, management, and new efficiencies ill afforded by the traditional nepotism found in Italian motorcycle companies. They need new blood quickly.

It's a shame more companies can't be run like Ducati who has managed to survive the economic downturn and actually increase it's market share. Then again companies like Piaggio are on the stock exchange and are making more money from third world countries so they have managed the downturn better no matter if 50% of the dealers have closed in the USA.

Bologna is and will always be one of my favorite cities. One of the best college town. One of the few that proudly show pictures of American GIs liberating the town square as you walk into the plaza the first time. It's a town that's 100% Italian, but gives you 100% pride in our country when reading about its history. If your into Motorcycles then its the mecca of scooters and big bikes.

Inexpensive Chinese scooters and motorcycles are quickly taking over the European marketplace. Even Honda and Yamaha have notice losses in their shares of the market. However, those that have been affected the most have been the European brands.

The list of companies in crisis or closed is pretty bleak:
Masiero (already closed),
Verlicchi, (done)
Kettle (in liquidation)
Electroplating (in liquidation),
RCM & Moto Morini (in bankruptcy and to auctioned off by next April 13, 2011 Odds are Silvio Berlusconnis brother will buy it for $5 million and assume no debt )
Marzocchi and Malaguti (both in desperate need of investment / investors / partners / and with deadlines to find them)

Malaguti has just gotten a notice from the local regional managers. Segretario Fiom - “se non trova entro l'anno un acquirente va verso la chiusura dello stabilimento da 180 occupati senza parlare della strage che ci sarebbe nell'indotto, anche a Imola” - "if you cannot find a buyer within a year we will close the plant. Bye to the 180 full time employees ( 200 plus part timers in the summer ) not to mention the carnage that there would be in related, even at Imola." Basically, stop asking for so much money (supposedly upwards of $22 million and take less for a cash partner. I'm sure if you have some backing you could get a controlling share for less.

Anyone have $10 million?

Let me borrow $10 million and I'll go do it myself. I think we could pull it off right now. I'll help you. Anyone looking to invest, you put US style management, marketing like Jim Viola had for Ducati USA in the late 90s and early pre-2003 era and you got yourself a Hollywood made brand. Move all marketing to LA. Bring back the Booty in Malaguti!

Seriously, make the cheap 50cc units in Asia. Keep the Maxi line in Bologna just like Piaggio Group did with Zongshen/Piaggio and Aprilia/Jincheng scooters. Keep the Vespa brand in Italy and license the name to third markets. Stop putting the Malaguti name on crap like ATVs and dirtbikes. Stick to what you know and what's profitable.

This is a historic low for Italian manufacturing. If people spent less time trying to find out who Silvio stuck it in and spent more time caring about "Made in Italy," they wouldn't be in this problem.

Italjet came back from the dead. The company is still in Bologna. Maybe not as big as it used to be, but the brand is known all over the world. I have no doubt Moto Morini, Malaguti, Marzocchi, will all come back.

We just don't want them to be purchased in liquidation.

Last I checked Mahindra & Mahinda of India, CF MOTO, Kymco, were all interested in Malaguti. Ducati would be the right partner as well, but nobody is going to jump in now, they all want to wait for the best price.

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