Indebted Pininfarina Seemingly on Verge of Being Sold, Future of Name Unknown

Pininfarina is broke and banks are on the verge of taking over a controlling stake in the company, we're hearing in reports from Italy. The legendary Italian design firm has more than $99 million in debt; while General Motors had almost $173 billion in debt before it went bankrupt, $99 million is an insurmountable sum for an operation the size of Pininfarina. With a 77-percent stake set to go to the banks, the Pininfarina family will lose control of the company its patriarch, Battista "Pinin" Farina, started in 1930. It's hard to say what the banks plan to do with Pininfarina once they take their stake. The company is a loss-maker, having shifted from designing cars and consulting on engineering projects to actual manufacturing in the last two decades. Pininfarina builds several Ferrari models as well as the Maserati Quattroporte and GranTurismo. Owning and operating car factories is a brutal business and doing it on a small scale is very difficult, much less doing so profitably. Because of this, we think it's unlikely Pininfarina will continue manufacturing vehicles; the facilities likely would be sold off to Ferrari and Maserati at a low price. As for the name and design operations, it could in theory be operated profitably; it's possible that the group of banks will also offer these to Ferrari. If not, there's likely no shortage of automakers who would like to add Pininfarina badges to their cars. We spoke with Jim Glickenhaus, the American businessman who worked closely with Pininfarina to develop the P4/5 road car (above) and the  P4/5 Competizione over the past few years, and he said that he had proposed to reorganize the business back in 2007. Even then, Pininfarina was heavily indebted and the business wasn't viable. Glickenhaus suggested to the family that it try to work a deal that would see the banks take most of Pininfarina's assets and a 49-percent stake in a new, streamlined design consultancy. Glickenhaus would have funded the little operation. Unfortunately, chairman Andrea Pininfarina died in a traffic accident in 2008 and the proposal was never subsequently discussed. We will continue to investigate the situation, and will publish any updates as soon as they're available. Pininfarina is broke and on the verge of banks taking over a controlling stake in the company, we're hearing in reports from Italy. The legendary Italian design firm has $99 million in debt//IT WAS 76 MILLION EUROS = $99 MILLION//—for what it's worth, General Motors had almost $173 billion in debt before it went bankrupt—an insurmountable sum for such a small operation. With a 77-percent stake set to go to the banks, the Pininfarina family will lose control of the company its patriarch started in 1930. from Car and Driver Blog http://blog.caranddriver.com

puts the internet to work for you. via task 647533