Wednesday, April 6, 2011

Mr. Berlusconi its time to help Malaguti!

Silvio is a little busy these days,

He's been bothering poor George Clooney about testifying. I hear Brad Pitt doesn't return his calls. That's ok he's one of the richest guys in Italy he can easily afford to hire some other celebrities. At the same time he's great at distracting the Italian people from the real problems at hand.

When it was convenient he showed up at the Malaguti Italy booth to promote "FORZA ITALIA!" when in reality the Italian motorcycle sector has been in decline for some time now. Above you see him with Learco Malaguti the son of the founder of Malaguti Moto (

This is the gentleman who has since retired, but during the height of his tenure he built up the company to what it is today. Learco also happens to be part of the reason I am in the motorcycle business so I am saddened by the whole turn of events of what I see happening in Italy at this time.

So my question is where is Silvio these days? Now when I see the employees of Malaguti out in the street?

Emilia Romagna is at cross-roads. Companies like La Perla now make most of their underwear in China. Brands that were once great are made in Asia or have closed. In 4 days Moto Morini is to be closed and auctioned off. What will become of the once famous heart of the Italian Motorcycle world?

Greed is killing the last family owned scooter maker in Italy and I feel bad for everyone involved. The good news is the Malaguti spares company will continue no matter what. So parts are available. This is the side of the business that makes plenty of money.

If an OEM Asian or Italian partner or a US investor isn't found we can count on that. The bad news is that it might have gotten to the point where only Piaggio can afford to assemble scooter units in Italy anymore. Even the Ducati CEO recently commented he might look at buying or assembling Ducati branded scooters in Thailand of all places. I think that's seriously a mistake since their partner down the street is still the perfect candidate for a merger with all the state incentives. More than likely a US turnaround firm could help in this process with the end goal of helping Ducati develop this tech.

I've gotten about twenty calls on the subject this week so I have to comment and its more of a rant on how much I care for the brand that got me into this industry. I see the workers striking and I understand their position. If you translate their comments to the press many of them have houses, payments, kids in college, they need their jobs. They are upset at what they feel is the bad management. Business is difficult for everyone right now and Italy is overrun with cheap imports, but part of the blame does lie with the management so they are correct to a certain degree. A lack of imagination,. management, and finding an Asian partner is part of the reason.

Click on the clips below.

They have a saying in Italy that a father can maintain seven sons, but seven sons cannot often maintain the father. Statistically most companies never make it past the third or fourth generation. Passion is what usually drives a business and that's something that isn't always passed on. At least not in the same field.

I know fully well the dynamics of a family business since 9 out of 10 small companies are family run in this world. So it's not an easy undertaking for anyone involved. In Italy like most latin countries family dynamics push you forward, but also often hold you back. All it takes is a few bad apples and a dynasty can be lost very quickly.

(Above Silvio a good friend of OEMs when they need help right?)

Add to that a world recession, pressure from new manufacturers in Asia, the economic crisis, and you have yourself the last holdout in Italy. There is Piaggio Group who owns pretty much everyone and then there is Malaguti the only other manufacturer left.

If Malaguti ceases to make scooters then Piaggio Group will have a monopoly on "Made in Italy" scooters and small motorized driven cycles. Nobody else makes scooters in Italy anymore. Beta, Italjet, Benelli are all made in China.

This is a real opportunity for the right players. There are American parties interested, too bad they can't get anyone on the phone. Faxes aren't returned, and if you read the comments in the press below there's more to the story. I have a feeling someone will save the company or the Malaguti family will reconsider the closing. This one of the last great brands left. It would be sad to see if fade into the night.

Check out the editorial at Motorsports Newswire on the developing story:

Good quote check out the full story:
We believe Italian brands can be competitive and with the right management could be a world player. Ducati is a prime example of the right way of building an Italian luxury brand. Is there any hope for Malaguti? As of today the workers are on strike. In our opinion new owners and new fresh management must be found or Emilia-Romagna attempt to subsidize a money losing operation, it is likely doomed to failure. The subsidies and incentives they are offering to an outside American investor will only work if the management company is guaranteed an operation without the current ownership.

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