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Lancia: too steep price tag for Fiat since Chivasso

16 May 2014 18:48 One comment


Lancia: Especially since FCA’s presentation of their industrial plan for 2014-2018 there is more cause to celebrate the incredible history of the glorious car brand than there is to celebrate its future. Because – let’s be honest here – one can hardly describe a make with only one model in its range as a worthy manufacturer, let alone competitor, in the mainstream market. But was Fiat’s dedication towards the 108-years-old brand actually ever sufficient enough? A very important moment in Lancia’s demise was undoubtedly the sudden closure of the Turin brand’s huge plant in Chivasso in 1993; a factory that produced by the highest standards at that time and was considered an example for the entire industry in Europe. This industrial earthquake took place in an atmosphere of corruption and deceit shortly after a first ‘quake’ halfway through the eighties when the profitable Lancia was supposed to save the withering Alfa Romeo financially within the new company structure ‘Alfa Lancia Industriale’. Lancia had at that point been steadily working towards a recognizable and firm brand image in Chivasso since the takeover by Fiat in 1969 by means of characteristics introduced by the founder (Vincenzo Lancia) himself; developing innovative quality through the highest standards and up to the smallest detail. A precious approach only maintainable via progressive and steady managing.


The latter had already been a struggling point in 1963 when Lancia opened the gates to its new factory in Chivasso – a rural township of no more than about 15.000 inhabitants – under the watchful eye of entrepreneurial family Pesenti. The Pesenti-group took over all the shares of the troublesome Lancia (partly due to financial mismanagement in motorsports by son Gianni Lancia) eighteen years after the death of Vincenzo Lancia (1937) from widow Adele Lancia. What followed was a very hopeful modernization of the existing plants in Borgo San Paolo and Bolzano (truck factory, nowadays IVECO). With the resurrecting of the historical luxury brand from Turin in mind, they even set out to build an entirely new and modern factory in Chivasso just north-east of the Piedmont capital, right alongside the important highway to Milan (A4, picture below). The first stone – with a parchment in honor of the Lancia-enterprise inside – was laid in 1959 by Lancia’s boss at the time, engineer Fidanza (pictures above), on a spot where cornfields used to stretch as far as the eye could reach. The landowners were paid 160 million lire in total by the township and Lancia. It was a major chapter in the Italian economic revival after the war; an enormous impulse for the local population who could only partly benefit from the employment in and around Turin. The coming of Lancia was considered an important opportunity for many people and was even regarded as an example for other big industrials throughout the country. At first, this new plant gave Lancia the opportunity to build 200 to 300 cars a day (coming from 70). A new assembly line for engines had meanwhile been installed in Borgo San Paolo alongside the production lines for suspensions and transmissions. The headquarters stayed put in the still new skyscraper (1956) at the Via Vincenzo Lancia. The transfer of the bodywork department to Chivasso caused the old one in Borgo San Paolo to become available for building special variants.


Chivasso stretched over a surface of more than 1,2 million square meters, 229.000 of which were covered by buildings. The Fulvia and Flavio – both built there – were to modernize Lancia’s range and be a turning point from the low sales numbers of the outdated Appia. The Fulvia turned out to be a winner mainly thanks to its high quality. Lancia Chivasso was a complete facility fitted with a department for producing panels or sheets, a welding department, a modern paint shop with automatic conveyor, an assembly hall of 440 meters long and a department for making seats and their upholstery. The supplies of materials mainly took place from the factory in Bolzano over roads or rails. In the factory’s start-up phase, though, an error in its design came to light. The welding department had no windows and an inadequate ventilation system. Employees complained about the dreadful air quality and said there was a constant haze throughout the hall, rather ironic given the nearby Po Valley. But the problem was solved quickly and Chivasso was everything you could expect from a hypermodern production location, with its own test track of 4,2km and a trail which led directly to the train station of Chivasso. Lancia was one of the very few manufacturers in the world to test every vehicle that was produced.



The machines came from Italy, Germany, Great Britain and the US. Because of its entirely self-sufficient production, Chivasso was for a long time – even long after Fiat’s takeover – a plant that could build cars right from the basis upwards and deliver a finished vehicle. This was also done by order of firms such as Pininfarina, Bertone and Zagato who couldn’t manufacture their own chassis. Lancia employed 10.182 people in production in 1968 and consisted of an office staff of 1.940 men and women all divided over Borgo San Paolo, Chivasso and Bolzano. 37.065 cars and 2.432 trucks or vans were built annually at that time. But not even these successful numbers could avert a takeover by the ever growing Fiat.


And so it happened in 1969, at the cost of a big chunk of the factory and offices in Borgo San Paolo, but Lancia continued its existence like it had been doing since its startup; a well-organized firm with its own schools (picture below), sports department (the factory fields had a few playing fields) and technical trainings to ensure their luxurious cars were produced by means of the highest standards.



Two years after Fiat’s takeover the production of Lancia-trucks in Bolzano ceased, while certain investments were meanwhile made in the existing plant where around 5.000 people were now employed. In 1974 they started to support Chivasso by building a factory for transmissions in Verrone near Turin which is today still operative under Fiat Powertrain. The development of a successor to the legendary Fulvia had in the meantime begun; the Beta based on Fiat-technique. A fun fact is that the Fulvia was kept in production as a coupé for enthusiasts for quite a long while after it had already been replaced. The Flavia/2000 that had served as a flagship model for a few years was given a successor too; the Gamma (picture above). Its design was closely related to Boano’s Beta but not in any way comparable to the ancient Flaminia it theoretically substituted. Fiat unfortunately kept Lancia from fitting it with a 6-cylinder engine due to the oil crisis and the severe local taxes on engines with high capacity. Agnelli did, however, launch the Fiat 130 with said power source which came across as rather inappropriate and was actually considered a matter of personal prestige. It was one of the first signs that Lancia was not fully able to do its own thing under Fiat in the seventies. Luckily though Lancia was able to introduce a number of special and gorgeous versions of its Beta such as the Coupé, the HPE and the Spider. There was even the Montecarlo at the end, a car that was originally intended to be a Fiat (‘X1/20’). They also had the amazing Gamma Coupé developed in Chivasso and assembled at Pininfarina’s factory (about 6.800 units over 8 years). Even an exotic (and obliged) street version of the Stratos was built in-house as far as the chassis concerned, while the folks of Bertone in Grugliasco built the rest of the car and fitted it with a monocoque bodywork (picture below).


The paint shop of Chivasso desperately needed to be modernized in the late seventies as the manual painting procedure did not always go as planned. The supply of paintwork towards a by-employees-operated flexible arm was not always cleaned like it should’ve been which resulted in several cars needing a repaint after they’d been examined. It is the reason why Betas sometimes used to differ in color, even though they were theoretically identical. Due to the definite closure of the paint shop in the old Fiat-plant in Lingotto, a new and entirely robotized one was installed in Chivasso. This not only resulted in a strong increase in quality, but also better working conditions.


Antirust treatments made their entry after nasty experiences with models from the seventies. An even bigger leap forwards was made with the installation of zinc baths halfway through the eighties. Lancia was together with BMW the only one worldwide to apply this working method. After each treatment and finish of the bodywork every car was checked entirely and tested afterwards. Lancia’s top quality was maintained. Especially so under Ghidella who made the historical brand into a competitive European luxury brand which was also highly successful in auto sports (ten times rally champion). The Delta and Prisma were mid-segment cars built in Chivasso with top-notch quality, which only added to the renewed success. When Themas starting rolling off the assembly lines in Mirafiori they also needed to call onto the expertise from Chivasso to ensure a class-leading finish (which wasn’t the case at first). The Autobianchi-plant in Desio took Chivasso as an example as well for their assembly of small luxurious cars. This even led to these two locations becoming a productive entity. The knowhow from Lancia’s factory resulted in remarkable sports cars such as the 037 based on the Montecarlo and the Delta HF Integrale invented for rally. These were both developed and built in Chivasso. The S4 was the only one to be built at Abarth, the laboratory for Lancia’s successful sports division.


But then, in 1986, came the takeover of Alfa Romeo under the controversial leadership of Cesare Romiti at Fiat. This dominant and self-willed CEO decided to join both luxury brands together and then started to economize drastically in times when the automotive industry actually started its globalization. Lancia was expensive, and that needed to change. The Turin brand had raised sufficient revenue, though, under Vittorio Ghidella, but he too needed to kneel before Romiti and obey his commands. The said revenue disappeared into the troublesome brand from Arese and Lord knows where it went to exactly. When the takeover – one which smacked of conflict of interest – of Alfa Romeo (with 34.000 employees and 2 factories) was announced there were already lots of critics wondering whether the successful Lancia (with 9.000 employees and 2 factories + Autobianchi) would in any way benefit from it. The nineties quickly revealed none of the two makes really flourished under ‘Alfa Lancia Industriale SpA’. Mismanagement, Libyan shareholders and fiddling with the bookkeeping were the cause of this. Chivasso was in 1990 fitted with welding robots and a renewed paint shop. Employees were building the new Lancia Dedra (pictures above), but little did they know the days of this great plant were already counted then.


The huge Chivasso was all of a sudden closed just like the Autobianchi-plant in Desio, while the production in Arese was also shut down more and more often. June 1st 1992 was when Romiti announced the closure of Chivasso. The big and modern factory was to be restructured under new management and the production of the Dedra would be transferred to the much smaller Rivalta (which closed its doors ten years later); an operation of 20 billion lire. Romiti’s intention was to come across as reassuring by claiming all employees – 4.200 of them – would be back at work sooner or later. The restructuring plan was well-received by the trade unions and everything went smoothly apart from one single strike. Most of the Lancia-personnel (some already operative since the brand was still on its own) were told they’d stay where they were and only a few hundred went to Rivalta or Mirafiori. Around 1.250 people were absorbed within new companies in the metal industry and Carrozzeria Maggiora. The latter continued assembling the Delta HF Evo2, the Fiat Barchetta and the K Coupé (picture above) in low numbers for a few years.


But Lancia’s doom was actually sealed already, even despite the introduction of several new models (K, Nuova Delta, Y, Z, Lybra, Phedra, Thesis, Ypsilon and Delta). The team that had come over from Chivasso for knowhow couldn’t really appreciate all the interference of the new Fiat-director Paolo Cantarella neither. He was one of Romiti’s dummies. The old CEO left Lingotto in 1998 with a firm golden handshake, but the damage was long done. Lancia was even forced to quit auto sports and the brand wasted away completely in the years to follow. An end came to Lancia Alfa Romeo Industriale SpA in 2002 after less than 20 years of a non-prosperous existence – to say the least. The jobs in the former Lancia-factory were lost after all (Maggiora stopped in 2003). When we visited the factory ourselves in 2011 we only came across a guardian who could do no more than give us a bag filled with Lancia-badges he had lying somewhere in a drawer inside his guardhouse (picture above). It was scant comfort for any Lancia-enthusiast going there in hope of finding more… Lancia turns out to be a luxury brand only partly well-managed since the first takeover outside of the Piedmont family. Well-considered investments with a long term vision were rarely the case for the Turin brand, with Chivasso being one major exception. Today the future looks sadder than ever. Knowing this car maker was once more up-class than Mercedes Benz and comparable to Bentley, it brings tears to our eyes to see it in its current state.


1 Comment »

  1. marsalach says:

    When Romiti took over at the time his challenge was to reduce production and development costs to free up capitals to diversify from a car truck tractor driven conglomerate to a diversified group. That happened at a time when games in mid-size and luxury where ongoing – especially in Europe. And while VW survived his bankruptcy Fiat was a leader in Europe. They just could not believe to be scaled back in such a short period like the next 10 years. Building quality, corrosion protection (Audi came up with zinc and later with aluminum structure while especially Alfa rusted already in its brochures.
    The idea of producing a blue print with Fiat and rebadge the cars into expensive Lancia or Alfa Romeo cars is what today are doing many groups as VAG or others, but Fiat had just a very poor execution not understanding the value of each brand. But especially the poor execution has shadowed the entire Made in Italy perception. To rebuilt that image is time taking and hard – as perception can not just eluded with good stile. And the return of Fiat brand to USA shows how much they have learnt from their past.
    But for each brand it is important, that it reflects clear value and sticks to its promise. This cannot attempt by ever changing logos but with genuine deliver of good and durable cars. To bad that Lancia did not have the luck to have a solid owner after its founder. The only hope is, that FCA will rethink about the heritage of any brand and invest in due time the necessary forces to unlock the potential of Lancia ones the italian Mercedes … Myself had an old Delta 1500 GT, two Dedra (still owning an Integrale), while the rest of the family had three Thema and one Kappa SW. We were very happy with them and I’m still proud to drive one. Exceptions are the latest Ypsilon or the rebadged version of Thema, which is a fine car but no Lancia.
    So lets hope for its future while best is yet to come – like a New Delta – New Stratos – New Thema – New Fulvia or New Beta Shouting Break.

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