Part 38 The Blue Oval and the Prancing Horse
By David Cavaliere
A number of moves by Enzo Ferrari that had a long lasting impact within the automotive world – “The Purge” as it has come to be known and “The Insult,” which is as good a description as any when referring to the spark that ignited Lamborghini. It was during the turbulent 1960s that Ferrari faced significant challenges. As costs continued to mount in racing, Enzo needed to produce more road cars to finance his racing activities. This required capital and would ultimately force Enzo to do something that was entirely outside his nature – to relinquish control.
The success of Ferrari in the 1950s and early 60s did not go unnoticed in the world of automotive manufacturing and was well noted on the other side of the Atlantic. Ford Motor Company in the early 1960s was the number two automaker in the U.S. and was trying to cultivate a more youthful audience – the coming of age of the Baby Boomers. It was attempting to recover from one of the biggest (and at the time, costliest) marketing mistake in history – the Edsel. To reestablish the brand’s power and forge an identity with the country’s youth, the blue oval was getting involved in many forms of racing and nothing symbolized speed and horsepower better than racetrack success. In the early ’60s, international racing success was spelled F-E-R-R-A-R-I.
By all accounts, Ferrari came into focus on Ford’s radar screen during January, 1963. CEO Henry Ford II and his top lieutenant Lee Iacocca, came up with the idea of purchasing the Italian automaker to jump-start Ford’s assault on America’s burgeoning youth market. Ford was still a year away from the phenomenally successful launch of the Mustang (introduced at the New York World’s Fair, April 17, 1964), but the direction of the company was clear. Ford’s first contact with Ferrari was in May 1963, through the American company’s Italian subsidiary. Ferrari was in a vulnerable state due to an ever increasing need for capital. His production numbers had increased rapidly during the early ‘60s, but his company was constantly strapped for cash. The framework for a deal was settled upon fairly quickly. There were to be two companies. One was to be called Ford-Ferrari and would be responsible for the gran turismos that Ferrari was already building. The second company, Ferrari-Ford, would construct racing cars. Ford would be the majority shareholder of the road-car arm. Enzo Ferrari would be the largest shareholder in the racing company. However, after ten days of intense negotiations, the deal fell apart. Enzo was not satisfied with 90% of the race division; he wanted complete control of Ferrari-Ford. Henry Ford II was not pleased that the deal had fallen apart, but rather than dwell on the failure, he simply said, “That’s okay. Let’s go beat them.”
With that, an epic automotive David versus Goliath battle ensued. It would last the better part of five years. Ford contacted Eric Broadley, owner of the British race car manufacturer Lola, to begin its assault. Dearborn’s principal weapon would be the GT40 series, a beautiful mid-engine racecar, developed from the Lola Mk6 and with the full might of the Ford organization behind it. The GT40s were powered by a small block 4.7-liter overhead valve Ford V-8. Ford’s first major attempt to beat Ferrari on the track was at Le Mans in June, 1964. The three entries failed to complete the grueling race. After a season-long series of dismal results, the program was handed over to Carroll Shelby after 1964.
Ford’s response was not unexpected, given the scale of the organization – shoehorned in a bigger engine. Armed with Ford’s NASCAR-based 7-liter big block V-8, the GT40 Mk II appeared at Le Mans in 1965. It still lost to Ferrari. The turning point was in 1966. The GT40 Mk II’s came in 1-2-3 and provided Ford with the first Le Mans victory for an American manufacturer. It was also the first victory for an American manufacturer at a major European race since Jimmy Murphy´s triumph with Duesenberg at the 1921 French Grand Prix. GT40 variants would also win at Le Mans in ’67, ’68 and ’69.
One of the criticisms of Ferrari had been that they were a late adopter when it came to technological modifications for his race cars. His was the last manufacturer to win Le Mans with a front-engine car - the 330 TRI/LM in 1962; however, it was the first to win it with a mid-engine car - the 250 P in 1963. Once Ford announced its plans to enter the endurance sports car championship, it became time for Enzo to bring bigger engines to the game. It built a variety of sports-racing prototypes with ever-larger and more-powerful 12-cylinder engines. Although Ferrari lost at Le Mans in 1967, it won the endurance crown on the strength of the mighty 4-liter 330 P4 and 412 P. As the financial pressures in racing increased, the Ferrari split between Formula One and sports car racing began to negatively affect both sides of the operation. In 1969, the F1 team finished a lowly sixth in the manufacturer’s championship scoring only seven points, their lowest points total ever. In great part, this was due to another direct assault by Ford. When the “return to power” was announced for the 1966 Grand Prix season, there was a scramble to develop suitable engines for the new formula. Most engine builders went for twelve cylinders. Ford provided the money to Cosworth, a high-performance engineering company to develop an engine. The result was ready in 1967 – the Ford Cosworth DFV. The engine went on to power most Formula One teams. During its quarter century of usage, the DFV (and its variants/derivatives) won 167 races.
The 1960s were a turbulent time for Ferrari for additional reasons. There were union problems in Italy, delays in obtaining parts, strikes, work stoppages and headache upon headache for Enzo. Sports car manufacturers such as Porsche, Jaguar and the upstart tractor manufacturer, Lamborghini began to chip away at Ferrari's market in both Europe and the United States. Il Commendatore’s focus on his Scuderia and indifference to passenger car production at his own firm took its toll. The production quality cars had slipped, although it had not reached the point of being shoddy, it was well below the quality that the marque was renowned for. Between 1968 and 1969, car sales dropped more than 15%, a significant amount for a company that produced only 700 or so cars per year. Lacking funds for expansion and with Enzo's insistence on competing in endurance racing and Formula One, the company began to suffer financially. Ferrari realized that massive amounts of money were required for the company to survive. As many other Italian companies have done, he turned to Fiat for help. On June 21, 1969, Fiat purchased Ferrari for $11 million. According to the terms of the agreement, Fiat gained 50 percent of Ferrari stock and would manage the passenger car operation, while Ferrari himself retained the other 50 percent and complete control over the motor racing operation. Fiat immediately took over the daily administration of designing, manufacturing, marketing and selling Ferrari's road cars. It invested millions into the modernization of the company's factory and also building Enzo a test track in Fiorano Modenese, something that he had always wanted but could never afford. By 1970, under the new Fiat management, production of Ferrari passenger cars had increased to more than 1,000 and by the end of the decade production had reached 2,000. Fiat doubled the size of the Ferrari factory and was committed to making Ferrari cars the focus of its international marketing for decades to come.