Pininfarina to cease contract manufacturing, transfer ownership to banks

It's been a rough few years for Italy's coachbuilders, and times aren't getting any easier. Bertone almost went under before a rescue plan was approved by the courts at the eleventh hour, and now Pininfarina is poised to follow them down the same path. Drowning in nearly €600 million in debt, Pininfarina is set to shut down its contract manufacturing operations and concentrate on its own electric vehicle initiative while the family loses control of its company to the banks.

Although contract manufacturing once constituted the lion's share of business for outfits like Pininfarina, those times are long gone. Pininfarina still makes the Focus Coupe-Cabriolet for Ford and the Brera and Spider for Alfa Romeo, but at levels hovering around a quarter of anticipated output. Instead, the design house will refocus on its joint production of the Bzero electric vehicle with Bollore, targeted to hit the market in 2010-11. Meanwhile, the grandchildren of Battista "Pinin" Farina – recently lead by Andrea Pininfarina (until his death in a tragic accident in August) and now led by his brother Paolo – will transfer 50.4 percent ownership to its creditors in exchange for a €180 million reduction of its debt, to be followed by a further reduction of €70 million in exchange for rights to the name. The family, meanwhile, will retain only 4.5 percent stake in the namesake company, with the remaining shares publicly traded (including some held by Enzo's son Piero Ferrari and some by Tata). The banks, however, will seek no management changes or board seats in exchange for the controlling interest.

[Source: Automotive News Europe – Sub. Req.]