Fast Times at Lamborghini

Tim Marrs

Tom Kowaleski was in charge of Chrysler public relations during the company's ownership of Lamborghini and thus faced the challenge of improving the brand's perception in its largest market, the United States. To that end, in 1990, Kowaleski pushed the Italian management to let American journalists have the first crack at the new Diablo - on a racetrack, where the car could really stretch its legs. "It was the last guy to drive the car, on the last corner of the last lap," Kowaleski says. "I saw him start to lose it, and he did a tank-slapper into the wall, grinding the car along the barrier until it stopped. The car was totaled." Despite Chrysler's resources, Lamborghini was still a small company, and the crash didn't help Italian/American relations within the company. "That was the only Diablo we had," Kowaleski says. "The Italians were nice to the guy [a Car and Driver editor] who crashed it - comrades in bent metal - but in private, I got called into the office and got thoroughly chewed out."

A new nadir in Lamborghini's fortunes began in 1994, when Chrysler passed ownership to a group of Indonesian investors. According to Lamborghini's historical account, "The new owners recruited a number of English and American executives who gradually proved to be less and less suitable for their positions. The oddest ideas started to pile up during the months that followed, calling to mind - for those who had already lived through the history of Lamborghini - the years of great psychological confusion between 1974 and 1980." The Indonesians wanted to put the LM002 off-roader back into production, even though it sold only 301 examples. They froze development of the "baby Lamborghini," only to restart it and then cancel it again. Even the indefatigably positive Balboni says: "The Indonesian management and ownership wasn't a great experience for us. They didn't put a lot of money into development. We were surrounded by people who weren't experts."

Barry Toepke was Lamborghini's public relations man in the United States from 1994 to 1997 and witnessed firsthand the corporate disarray that extended from the showroom floor all the way to the upper echelons of management. "There was an amazing lack of direction," Toepke says. "Lamborghini didn't have vast sums of money. There'd be a board meeting in Bali, and they'd say, 'We'll provide $2 million to fund this,' and then they'd change their minds. You can't do that and succeed in the marketplace, obviously.

"Meanwhile, the factory was building cars and stuffing them into the U.S. without orders. There were a lot of accounting games going on. In 1994, we inherited a lot of 1992 and 1993 models that were still sitting around and were inferior to the 1994 Diablo VT."

Compounding the sales woes was a dealer network that was still primitive in its approach to customer relations. "I walked into a couple of dealerships that actually had yellow caution tape around the cars, so nobody could touch them," Toepke says. "I asked, 'How do you sell cars like that?' and they said, 'We don't.' "

Back in Italy, the international factions within the company protected their turf at all costs. Toepke himself once set off a firestorm when he was inadvertently admitted to a room where he spied a prototype car in the works. "The Italians were livid that the American saw the model," he said. "It was a big state of distrust. Everyone was looking over their shoulders." Another time, Toepke witnessed an argument between executives at the factory that required police intervention to break up.

Finally, in 1998, Lamborghini came under the control of Audi AG. The Germans brought much-needed management discipline, welcome access to the latest technology, and - most important - deep pockets to fund product development. The company's recent success has been well-documented, with record sales and pretax profits last year. Lamborghini is opening a U.S. distribution headquarters for the first time ever, in Los Angeles. The Gallardo has a waiting list through the end of the year. Considering that the Lamborghini corporate environment looked like an Ultimate Fighting Championship cage match less than fifteen years ago, the company's current challenges - primarily, maintaining profitability without diluting brand image - seem almost quaint by comparison. Current CEO Stefan Winkelmann, speaking on the subject of balancing profit with product purity, makes a comment that also applies rather well to Lamborghini's unlikely perseverance since 1963: "So far," he says, "it's worked out."

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