Fiat acquired the shattered remnants of Lancia in 1969. The Italian car giant was ill-prepared for what it discovered.
Fiat made its name, reputation and not inconsiderable fortune from small cars, cost-engineered and rationalised to be inexpensive to produce, to buy and maintain. During Italy’s post-war industrial boom, the Turin car maker grew massively catering to the home market’s growing affluence and thirst for motorisation. By the late 1960’s however, Fiat’s management realised that over 70% of their car business was concentrated in the bottom end of the market – one with the least potential for profit.
Fiat’s management saw their future upmarket, an arena hitherto unfamiliar to the Italian car giant and one the company had ignored in the post-war boom. However, they faced a fundamental problem, one that went to the very root of their corporate culture. Fiat’s modest yet technically brilliant engineering chief, Dante Giacosa, was ideologically opposed to a move upmarket and at Fiat, engineers exercised enormous influence.
In a detailed paper discussing the effects of Fiat’s takeover of Lancia, academic, Giuliano Maielli makes the case that; “production engineers at Fiat had reproduced an engineering ideology. This is well reflected by Giacosa’s conviction that the role of Fiat was to produce cheap reliable and enjoyable cars for the people rather than expensive luxury cars.” Despite his misgivings, Giacosa’s team embarked upon the design of a new large Fiat saloon – a car designed with at least one eye on the North American market. But the 130 Berlina, despite its many fine qualities, proved a lacklustre seller; chief amongst its deficiencies being the Fiat name failing to resonate with luxury car buyers.
The 1969 acquisition of Lancia therefore, was timely. It provided a ready-made nameplate with a proven track record of engineering excellence and the sort of sober-suited upmarket image that would open all the right doors. All that was required was a series of cost-rationalised models to be developed and Fiat would be in a position to mop up a large chunk of the European upper-medium car market.
So went the theory anyway – reality proving a good deal more challenging. Fiat was already struggling to adopt a fundamental cultural shift from small to larger cars, but with key decision-making power regarding product retained within Fiat’s engineering department, (already known to be ideologically opposed to change), such changes were being resisted. Into this political maelstrom, Lancia’s engineers didn’t really stand a chance.
They were hardly in a position to challenge Fiat’s predominance anyway. The company Fiat acquired in 1969 was a pale shadow of its glory days. “We have found the engineers’ drawers empty,” Fiat supremo Gianni Agnelli stated upon his acquisition of the stricken car firm. Dr. Antonio Fessia – Lancia’s acclaimed technical director had died in 1967 and due to Lancia’s financial woes, his position remained unfilled for well over a year.
Lancia’s product range had become dated – the flagship Flaminia débuted back in 1957 and their newest model – (the Fulvia) – to 1963. Due to the crisis within the company, there was little in hand to replace them, necessitating Fiat to start from scratch with the development of a new generation of cars, and in a first for Lancia, cost engineered. Agnelli appointed Fiat 130 project engineer, Sergio Camuffo as Lancia’s technical director.
Camuffo was reputedly horrified by what he found upon his arrival. Staff morale was on the floor and worse, engineering staff were departing in droves. Camuffo moved to arrest what was becoming a mass exodus, convincing key engineering staff to remain; namely chassis engineer, Romanini, and engine chief Ettore Zaccone Mina – (the engineer responsible for the Fulvia’s sublime V4 unit). They embarked on a three year crash development programme for a new model to replace the compact Fulvia. Only with this car in hand, could thoughts turn to the development of more upmarket models.
Read part 3 here
Sources, quotations & acknowledgements: see part one.