Latest / Family Business Stories with Fexingo: Succession, Legacy, and Multi-Generational Companies / How the Ferrari Family Lost Control of the Prancing Horse
Transcript
- Lucas: There's a story that Enzo Ferrari liked to tell about the moment he realised he'd lost control of his own company. It wasn't during a boardroom coup. It was in 1963, when he walked into his factory in Maranello and found a group of workers playing cards — because they'd gone on strike over a pay dispute, and he couldn't do a thing about it. Luna: Wait — the man who built Ferrari, the most dominant racing brand in the world, couldn't order his own employees back to work? Lucas: Couldn't. The company was structured as a partnership. Enzo owned 50 percent. A wealthy Modenese businessman named Giovanni Agnelli — no relation to the Fiat Agnellis — owned the other 50 percent. And under Italian law at the time, a 50-50 split meant deadlock on any major decision, including labour relations. Luna: So a single strike revealed the flaw in his entire ownership model. That's a pretty vivid classroom example. Lucas: It is. And it set off a chain of events that ended with Enzo Ferrari selling the majority of his company to Fiat in 1969 — keeping only a tiny sliver of voting control for himself. That structure, by the way, is basically what Ferrari still operates under today, even after its IPO. Luna: Let's back up. How did Ferrari even end up in a 50-50 partnership in the first place? Lucas: Enzo started building cars in 1947, but the company was chronically undercapitalised. He poured everything into racing — often at the expense of the road-car division. By 1961, he needed cash to develop a new V12 engine, and a local industrialist named Giovanni 'Gianni' Agnelli — again, not the car guy — offered to invest. The deal was simple: each gets 50 percent, Enzo stays as managing director, and the company keeps racing. Luna: But that deal didn't give Enzo a controlling share. It gave him a tie. Lucas: Exactly. And for a few years it worked. Ferrari won Le Mans in 1963, 1964, 1965. But the strike in '63 exposed the cracks. The partner, Agnelli, got cold feet about the racing budget and started pushing for more conservative management. Enzo was furious. He famously said, 'Ferrari is not a company. It is a workshop. You cannot run a workshop by committee.' Luna: So what did he do? He couldn't buy Agnelli out, he didn't have the money. Lucas: He decided to sell — but on his terms. In 1963, he secretly opened talks with Ford Motor Company. Henry Ford II wanted to buy Ferrari to break into European racing and beat Enzo at Le Mans. The talks got all the way to a handshake agreement: Ford would pay about $18 million, Enzo would stay as manager, and Ford would get the car business plus full control of the racing program. Luna: I've heard this part. The deal fell apart at the last minute because Ford insisted on owning the racing team outright, and Enzo wouldn't surrender control of the scuderia. Lucas: Exactly right. Enzo walked away from $18 million — roughly $180 million in today's money — because Ford wanted the right to tell him what to do on race day. That single sticking point is what led Ford to build the GT40, which then beat Ferrari at Le Mans in 1966, '67, '68 and '69. But for Enzo, giving up the racing soul of the company was simply not an option. Luna: So Ford falls through. What's Plan B? Lucas: Plan B was Fiat. By 1965, Enzo realised he needed a partner with deep pockets and a lighter touch on racing. Fiat's chairman, Gianni Agnelli — the actual car-family Agnelli — was a Ferrari fan and a racing enthusiast. He offered a deal that Enzo couldn't refuse: Fiat would buy 50 percent of Ferrari, leaving Enzo with the other 50 percent, but with one crucial difference — Enzo would retain a single share of voting stock that gave him veto power over any change to the company's racing program. Luna: A single share? That's a remarkable negotiation outcome. Lucas: It's the most famous 'golden share' in corporate history, even if it wasn't legally called that at the time. Enzo kept that share until his death in 1988. And after he died, that voting share passed to his son, Piero, who still holds a stake in the company today. When Ferrari went public in 2015, the Agnelli family's holding company, Exor, retained majority voting control — but Piero Ferrari remained a board member with a special class of shares. Luna: So the lesson for family businesses is: a 50-50 partnership can be a ticking bomb unless you embed some kind of control mechanism from day one. Lucas: Exactly. Enzo learned that the hard way. But he also learned that you can give up economic ownership and still keep strategic control — if you structure it right. The deal with Fiat gave Ferrari access to capital, distribution, and manufacturing scale, while Enzo kept the one thing he valued most: the right to decide when and where his cars would race. Luna: And he never lost sight of that. I remember reading that when Fiat wanted to expand the road-car lineup into a four-door sedan in the 1970s, Enzo vetoed it. He said, 'Ferrari does not make family cars.' Lucas: He did. And because of that golden share, he could enforce that. It's a reminder that control isn't always about the percentage you own — it's about the rights attached to the shares you keep. Today's Ferrari is a publicly traded company worth roughly $70 billion, but its governance structure still reflects Enzo's obsession with racing autonomy. Luna: So let me ask this: could a family business today replicate that structure? A founder with a tiny economic stake but outsized voting power? Lucas: It's harder now. Stock exchanges and institutional investors have pushed hard for one-share-one-vote governance. When Ferrari IPO'd on the New York Stock Exchange in 2015, it had to create a loyalty voting structure — long-term shareholders get extra votes — to preserve the controlling influence of the Agnelli family. Enzo's single share wouldn't fly in today's regulatory environment. Luna: But the core principle remains: define what you will not trade away. Lucas: Yes. And that's what I find so compelling about the Ferrari story. Enzo was famously difficult — mercurial, secretive, sometimes cruel to his employees. But he had absolute clarity on what the company was for. It wasn't a car company that raced. It was a racing team that happened to sell road cars to fund the racing. Every decision flowed from that identity. Luna: It's also a cautionary tale about letting ego get in the way of practical succession planning. Enzo's son, Alfredo — known as Dino — died of muscular dystrophy in 1956. Enzo never fully recovered emotionally. He didn't train a clear successor until very late. Lucas: That's right. Piero, his second son, was born in 1945 but wasn't formally recognised as Enzo's heir until the 1970s. For nearly two decades, the company had no clear succession plan. The 50-50 partnership with Agnelli was, in part, a stopgap because Enzo didn't have a family member ready to take over. If Dino had lived, the entire ownership story might have been different. Luna: And that's the thing about family businesses — the emotional and the financial are completely intertwined. You can't separate them. Lucas: You really can't. And I think that's why these stories resonate so much with our listeners. Whether you're running a bakery or a $70 billion luxury carmaker, the same tensions show up: control versus capital, legacy versus growth, family loyalty versus professional management. Luna: Speaking of which — and I know this is a bit of a shift — but conversations like this one are exactly why I value having this show as a resource I can return to. And I know that producing it takes real work. If these episodes have moved your own thinking forward, or helped you in your own business decisions, there's a small way to keep the show going. Lucas: Luna's right. We keep the podcast ad-free and independent, and listener support is what makes that possible. If you've gotten something out of this episode, you can find us at buy me a coffee dot com slash fexingo. No pressure, no perks — just a way to say the show matters to you. Luna: And it genuinely helps. Every bit goes straight into research and production. Lucas: Alright. Back to Ferrari. One final detail I love: when Enzo died in 1988, his funeral was held in Modena. Thousands of people lined the streets. But the company released a statement that read, simply, 'He made our cars dream.' And in a way, that's the whole point. He built a family business that outlasted him because he was willing to give up ownership to preserve the dream. Luna: It's a good note to end on. Next time, we'll look at a very different kind of family business — one that managed to keep control without any outside capital at all. See you then.