Alfa Romeo’s history as a company isn’t something that many entrepreneurs or business administrators would have liked to experience. To put it simply, it went through a lot. Founded in 1910 as A.L.F.A, the young automaker got involved in racing as soon as possible. But that didn’t last long. The “Romeo” part was added a decade later to properly honor the efforts of Nicola Romeo, who turned the factory around to support war efforts and who also supervised the return to proper car making.
After the first Alfa Romeo badged car was introduced – the Torpedo 20-30 –, the main backer of the Italian automaker went bust. But the Italians stepped in and somewhat saved their entire industry with public investments in companies like Alfa Romeo. The state owned the brand until 1986. Along the way, it struggled, and going through another World War didn’t help at all. But the decision to make small and chic cars saved the brand from disappearing off the face of the Earth.
Unfortunately, the 70s were tough, and there was no sign of a positive cash flow for the brand. And things didn’t change. In 1985, sales were way below the target.
Ford buying Alfa Romeo – why wasn’t it possibleThe Italian state was fed up with having many unprofitable companies in its portfolio. Since Alfa Romeo didn’t manage to do something that could’ve turned it into an international legend like, let’s say, Ferrari, its owner wanted to get rid of it. Politicians back then also wanted the public sector to focus on things that matter to its citizens rather than doing business and being good at it.
Among prospective buyers was no other than Ford – the same company that came incredibly close to owning Ferrari 23 years prior, in 1963. What the Americans didn’t know at the time was that fate sometimes has a funny way of choosing what will happen to you. And, in most cases, it will make you feel like you’ve experienced a deja-vu moment.
Negotiations began, and the word spread quickly. An offer was made. Ford wanted to pay for 20% of Alfa Romeo at first and keep its options open by 1994 when, if all went right, the Americans would end up owning most of the Italian brand. They also promised a five-year investment plan that amounted to $4 billion in today’s money. This would’ve helped Alfa Romeo manufacture around 400,000 cars per year until 1994, out of which 50,000 would’ve been Ford models.
Everything looked alright, and the Italian state was looking like it was ready to sell Alfa Romeo to Ford.
Enter FiatBut not everyone agreed it would be a good idea to let Alfa Romeo become a European Ford subsidiary, a mere contract manufacturer that could end up with no real Italian DNA. Fiat learned about the whole deal and made a counteroffer.
While Americans had a strong interest in owning Alfa Romeo, they weren’t ready to assume the same responsibility as Fiat did.
Moreover, adding the fact that the brand would remain Italian also mattered a lot to the people who had the power to call the shots in 1986.
In the end, Ford lost. Alfa Romeo was sold to Fiat, and the state was relieved of a lot of debt. But some say that move was an incredibly smart one business-wise and from a moral point of view – a part of Italy’s car culture wasn’t going to be lost to Americanization. It was a clear win for Italy and another defeat for Ford.
“Every time I see an Alfa Romeo pass by, I tip my hat,” famously said Henry Ford in 1939. Little did he know that his company was extremely close to owning the automaker whose products he so much admired.
But history might have proved to everyone involved that sometimes it’s better to keep passion and business separate. There’s only one thing left for us to do now – wait and see what the next decade will look like for Alfa Romeo and Ford.
If you want to learn more about the whole Ford v. Fiat competition for Alfa Romeo, then watch the video down below where Matteo Licata adds more specific details.