Cycle News - Archive Issues - 2000's

IfIIII Agusta's By PHOTOS C'audio Casfig'ioni ALAN CATHCART KYOICHI NAKAMURA By laudio Castiglioni has reason to be relieved. The 56-year-old owner of MV Agusta Motorcycles the company formerly known as Cagiva, embracing also the Husqvarna off-road marque - has succeeded in rescuing his company from the last chance saloon, after the collapse of its proposed merger with Piaggio that was inaugurated as long ago as July 2001, with Piaggio acquiring 20 percent of the MV Agusta share capital prior to a proposed full union of the two companies. But for the past year MV's 600-man workforce, at its three different factories located in and around the company's Northern Italian base at Varese, has been essentially laid off, with only sporadic production of its back-ordered four-cylinder F4 and Husqvarna dirtbike models, as Castiglioni fought to prevent his company from sinking under by unwrangling it from the substantially more heavily indebted Piaggio Group, which transpired to be suffering mightily in the wake of the worldwide decline in scooter sales and the intense competition from Far Eastern rivals in a price-driven market. But, after the collapse of the 18-month-Iong negotiations with Piaggio, and with MV itself heavily in the red, Castiglioni finally signed an agreement on January 10 with the Banca Intesa merchant bank holding the majority of his firm's accumulated debt, calling for a cash injection to underwrite the restart of MV production and thus ensure MV Agusta's continued existence. Such a move was made possible by the company's successful application to enter into "amministrazione controllata," the Italian equivalent of U.S. Chapter 11 bankruptcy (the same as United Airlines is currently undergoing). This was approved by Varese bankruptcy judge Marco Lualdi last November, after determining that the backlog of orders for MV's products, the quality of those products, the historic significance of the marque, the interests of its workforce, and Castiglioni's projected business plan for regaining profitability all justified the company's being handed a lifeline in order to try to trade its way out of insolvency. The chance to learn more about the deal, and MV Agusta's future, from Claudio Castiglioni himself came by calling on him at MV's lakeside Schiranna factory below Varese, where the constant flow of trucks and workers across the factory yard outside his office window, which on a recent previous visit had been deathly quiet, underlined its more immediate benefits. Claudio, during the past two years MV Agusta has experienced the most difficult period in its long history. How did this happen, and what is the company's future in the wake of the collapse of its merger with Piaggio? Does it have one? EmPhaticallY, yes - it does, although there have been moments in the past year when even I began to doubt this would be so. But this situation came about through the actions of other people, leaving us in an impossible position we have only C now succeeded in resolving. Since it's not my policy to criticize others through the medium of an interview, even with someone like yourself who is such a close observer of the Italian motorcycle industry, let's just turn the page and look to the future. Okay, but to be quite blunt, how can a potential customer for one of your products have any confidence in the company's future existence? How does he know the same thing won't happen again, and he'll be left stranded with no parts backup, no after-sales support? Alan, you know better than anyone that I've given my whole life to motorcycles. My brother and I rescued Ducati from the ashes, only days before it was due to be closed forever. We tumed it around, developed a range of new models that repeatedly won World Championships, and brought the fruits of that success to the customer. We also created Cagiva as our commercially successful family marque and achieved further competition success at the highest level, as the only European company to compete with and defeat the Japanese in 500cc Grand Prix racing. After we left Ducati, we produced other bikes bearing the MV Agusta badge, which the market has confirmed as extremely desirable and which I certainly consider important milestones in the development of motorcycle design. A 30 APRIL 2, 2003' cue • Et n e vv s However, it is really apparent that the same process of consolidation which is taking place in the car world will also occur in bikes - just look at Suzuki and Kawasaki, for instance. To reduce costs and remain competitive, it's necessary to explore joint ventures with other companies - and that's what we did with Piaggio, in order to create a true fifth force in world motorcycling. This would have been the only manufacturer outside Japan producing scooters, dirtbikes, minibikes and every kind of full-sized motorcycle, especially sportbikes - a complete range of models bearing the names of glorious marques, each at the highest level in their respective categories. We had zero crossover, zero competition between us in any model sector. Productwise, it was a perfect marriage. But for reasons which even now I don't fully understand but which were entirely due to the other side, this did not work out. The result was a disaster for MV Agusta in that, while we were waiting for it NOT to happen, our production declined, and we were unable to satisfy the thousands of firm orders we already then had, and still have, from all round the world for our products. It's the most frustrating situation I've ever been in, and now it will be up to the courts to decide who's responsible for that - and

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