cycling utah July 1999
Bianchi returns to cycles to survive
By Greg Overton
At the end of World War Two after the devastation of the major Bianchi factories due to bombings, and the death of company founder Edoardo° Bianchi, the company set about resurrecting the empire. Leadership passed to Edoardo's son, Giuseppe Bianchi, who had spent several years away from Italy studying Industrial Engineering.
Giuseppe restructured Bianchi's manufacturing processes almost immediately and retooled its major factory to reflect the ideas and theories he had learned. This investment nearly wiped out all of the company's war reserve surplus funds, and an international loan from the United States was obtained through the Bank of Milan in the amount of one million U.S. dollars.
With the aid of this loan, the Bianchi factory was able to regain much of its manufacturing capacity in the three years after the War. The company's hopes were placed upon the 125 2T motorcycle, which was offered in as many as seven different versions, but production could be streamlined because all versions used the same basic chassis and engine. The little motorcycle was a hit and the company made a quick and strong comeback.
The bicycle market was very flat for Bianchi at this time, however, due to shortages of raw material and a glut of newly trained welders and brazers from the war opening up their own bicycle manufacturing companies. And with the military selling off its war surplus vehicles cheaply (most of which were produced by Bianchi), there were few orders for Bianchi's heavy machinery.
This situation brought about a change in company philosophy, as it began concentrating on exporting products to third world and Latin American countries. While this move did increase orders, it created a new expenditure sheet as well, with the costly establishment of overseas offices and agents.
Exasperating the company's capital shortage was the slow-moving Italian government's non-payment of war reconstruction funds, now nearly three years past due. Profits for 1949 were generous nevertheless, at least on the books. The numbers were aided by write offs and promised receivables, so that stockholders would remain comfortable with their investments.
The years 1950 and 1951 were more of the same - good bottom line returns, but hardly any liquid funds available. This led to the necessity for additional loans from the Credito Italiano Bank for cash against receivables. This showed the company to be on more sure footing, which gained another $670,000 investment from the United States.
Much of this new capital was used to establish stronger agents and presence in Latin America and also the growing Far East markets where small vehicle and motorcycle sales under the Bianchina name were selling well. From 1950 onward, Italy's economy began a rapid recovery with the help of American money obtained through the Gaspari Law, and the industrial region of northern Italy was booming.
With matters looking up, Bianchi returned attention to its marketing efforts. Relying on the foundation begun by Edoardo, it looked to capitalize on racing success to boost the company image. It found itself employing a true superstar of sport named Fausto Coppi. Il Campionissimo had been racing for the Bianchi team since the late thirties, but little marketing of his success had been done through the war years and immediately thereafter. The cycling world certainly knew of his greatness, and the press duly published his political stance during the war, but the company would rely heavily upon success in sport, even if those successes occurred in previous years to promote its virtues. It worked, and in fact, continues to work today.
The company's motorcycle and bicycle divisions soared on the wings of Coppi's reputation. There were now four separate and complete bicycle lines - the Aquila Corsa with four racing models, the Scudo Lusso had four sport models, the Aquila Lusso with four touring/sport models and the Aquila Extra Lusso had four city type bikes. Along with this line up was the introduction in 1950 of the Aquilotto moped, with seven distinct models of its own. Bicycle owners could purchase an Aquilmotoro engine that was made to retro-mount onto their bicycle frame. Here was a new twist!
By the mid fifties, the company was beginning to show symptoms of ill health. Every division except cycles was showing a loss, and the cycle divisions did not produce the sort of revenue required to carry the company's heavy machinery through to better times. The cycle division had Coppi as a figurehead, but the vehicle division had no such icon, and the likes of Ferrari, Maserati, Guzzi and Ducati were dominating motor sport. Any publicity remaining went to the farm machinery maker Lamborghini for his new automobiles.
The late fifties saw flattening motorcycle sales as reserves were taken from this division to help the struggling ones. Head engineer of the motorcycle division, Sandro Columbo was "down graded" to head of the motorcycle race team and good engineers and designers were leaving. Boardroom squabbles over resources and the inability to act quickly to market trends because of this lack of cooperation led to a merger of Bianchi's vehicle division with Fiat and Pirelli. This was the first step in the buyout by Fiat of the vehicle division.
New divisions were drawn to better serve the company - cycle manufacturing was absorbed by Edoardo Bianchi Motomeccanica SpA, and was located at Via Fantoli 17, Taliedo. Production of spare parts was given to Soccor SpA, and Bianchi Nautica (a very small, but well respected boat division) was liquidated.
Now Bianchi was once again only a cycle maker. But motorcycle sales were very slow, and the product was behind a rapidly changing market due to the previous years' stumbling administration.
In 1958, Sandro Columbo left the company to become chief designer for Innocenti, Bianchi's major competitor, whose Lambretta cycles were on the rise to Bianchi's detriment.
Another great blow was the death of Fausto Coppi to malaria (as reported in a previous Classic Corner). The company was in turmoil, although bicycle sales were stronger than ever. This was akin to having a supermarket where apples are selling out, but nothing else is successful.
Motorcycle racing achievement was very strong as well, thanks to new designer Lino Tonti and team manager Gino Oriani, who was brought over from the bicycle team for his tactical knowledge. Bianchi's racing motorcycles had regained dominance on the track, but were perhaps too technically complicated for the mainstream buyer, who chose simpler, less expensive machines.
Then another blow was dealt in 1959, with the introduction of Fiat's tiny 500 automobile. A small, cute, comfortable and practical commuter car for less than the cost of most Bianchi motorcycles. This racing-modifiable car unintentionally sounded a death bell for most of the Italian motorcycle industry, and certainly for Bianchi's motorcycle division.
On October 30, 1964, General Manager Ferrucio Quintavalle negotiated with creditors a 40 percent settlement of its debt to forestall bankruptcy in the Court of Milan, and to prevent seizure of the company's assets, most of which were related to companies that Bianchi now made products for. These included Ferrari, Fiat, Puch and Motobecane. Another directive of the agreement was to allow the bicycle division to operate independently as Officine Metallurgiche Edoardo Bianchi SpA.
The following year, this company produced no fewer than nineteen different racing bicycles, along with many other styles from industrial delivery bikes to comfort bikes for "women and priests." Propelled by Italy's new cycling hero, Felice Gimondi, this company that had started with the bicycle and grown to huge proportions had now suffered huge losses, and was back to its foundation blocks as though nothing had happened.
Changes were still ahead for this Bianchi and its products, we will explore them in a future "Classic Corner."