Italy’s “Surreal” Conditions Prompt Lamborghini Stoppage: CEO

One Italian automaker is going above and beyond the government's measures to halt the spread of coronavirus.

While Italians are barricaded at home trying to weather the coronavirus epidemic, luxury car brand Lamborghini has gone above and beyond the government’s requests and independently decided to shut down its only factory in the province of Bologna for the well-being of its staff and in a sign of respect to the surrounding community.

“The coronavirus situation in Italy is unbelievable—you have to go through it to understand it. I find it is surreal,” Lamborghini chairman and CEO Stefano Domenicali told Andrea Fiano, editor of Global Finance and Tiziana Barghini, correspondent, in a telephone interview on the heels of the announcement. “I think that even in Europe there is no full realization of what is going on in Italy these days.”

Good industrial relationships with employees and Italy’s proverbial flexibility will keep the company’s yearly production up and, hopefully, deliveries and revenues strong, he said.

From March 13 until March 23, the output of the prestigious Lamborghini cars—which cost at least $200,000 each—will be halted. Out of 1,800 staff, only 300 to 400 people are able to work from home. All the others will be furloughed, with full pay, in what the 54-year-old CEO calls “a sort of mandatory holiday.”

“We wanted to send a strong message, given the situation, and this is why we made such decision,” he said. “Of course, we will keep monitoring the situation every day and decide what is best to do next.”

With this action, Lamborghini surpasses the mandatory response. “We would have done—and will do, of course—whatever the government and the authorities ask us to do in terms of safety,” Domenicali explained. “But we wanted to go beyond and above and give a strong sign of sensitivity for what is going on in the community. It is an extraordinary decision taken for extraordinary times.”

As of March 12, the Italian Health Ministry said there were more than 15,000 people infected with coronavirus and above 1,000 deaths from Covid-19 pneumonia. In the province of Bologna, where the Lamborghini factory is based in the village of Sant’Agata Bolognese, there were 122 people who tested positive for the illness.

“Only someone who is living here can understand how difficult is to make such a decision,” says Domenicali, who on March 15 will complete his fourth year as head of the luxury brand, now part of the Volkswagen group. “For me, the priority is the welfare of the people working here. Because there is an important team spirit, our staff will see how important their presence is and their work for us and for our result. They will also be the first to understand the needs of the production line when the crisis is over. I am sure of this, as I know them.”

The company is halting production for at least nine days, until March 23, which aligns with the timeframe of the Italian government’s coronavirus-related mandates. “Then we will see how the situation develops,” Domenicali said. “We will decide what to do next as the situation develops, as at that point any next measure will likely affect all the industry and different industries.”

The CEO is relatively confident that the luxury automaker can weather this storm, and sees the goodwill from employees as a key component to recovery. “If the market will be as good as it was before this crisis, it will be easy for us to recover the output, given the good industrial relations and our flexibility,” he says. “We will be able to work in August [when manufacturers in Italy usually shut down for the holidays] or we will work over weekends. This will not be a problem.”

Until the crisis, the company had been “growing in an exceptional way,” Domenicali said. After having hit a record high in 2019 with 8,200 units delivered, Lamborghini was firing on all pistons in the first two months of 2020, he said. In January and February, a total of 1,229 cars were delivered. “So far we did not have any cancellation, which is extraordinary given what happened around the world,” Domenicali said. “Of course, I do expect different reactions by the markets given the sharp corrections in the stock markets around the world. I cannot imagine that this will not impact our demand.”

However, in addition to building a good relationship with factory workers, the brand has built “great trust” throughout its worldwide dealer network. “They know that they will get the cars they want,” said Domincali. He noted that the Chinese market is already improving, although other markets are still behind. “China has a unique market and I foresee that other markets will be slower to pick up,” he said.