Italian Investment in the United States – Contributions to a History

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Italian Investment in the United States – Contributions to a History
Italian Investment in the United States –
Contributions to a History
Federico Barbiellini Amidei
Banca d'Italia
Structural Studies Department
Economic and Financial History Unit
Via Nazionale, 191
00184 Rome - ITALY
ph.: ++39 06 47925956
fax: ++39 06 47925444
e-mail: [email protected]
Andrea Goldstein
Senior Economist
2, rue André Pascal
75775 Paris Cedex 16 - FRANCE
ph.: ++33 01 45248946
fax: ++33 01 45248500
e-mail: [email protected]
This still incomplete draft is the basis for a presentation at the eleventh annual conference of the European
Business History Association, Université de Genève, 13-15 September 2007. We thank Buitoni, Business
Week, Camera di Commercio Italiana di New York, Centro per la Cultura d’Impresa, Fondazione IRI,
Generali, and Time for providing background material as well as access to their libraries and archives.
Fabio Cassese generously lent us a rare edition of the volume on Italy published by the Carnegie
Corporation’s Institute of Economics in the series of studies dealing with problems of international
economic reconstruction (McGuire 1927). Many others helped us on specific topics, including in particular
Torsten Feys, Loredana Panariti and Elisabetta Tonizzi on Italian shipping companies. This paper in no
way reflects the views and the opinions of Banca d’Italia and the OECD.
In 1908, per capita income in Italy was only half as high as in the United States. Nonetheless, that year –
only eight years after inaugurating the Corso Dante plant in Turin – Fiat set up a subsidiary in the United
States, the first European car-maker to produce there. By 2005, Italy had become one of the OECD largest
economies, and yet (at slightly more than 100,000) all its multinationals combined in the United States
employed less than twice as many people as a single Dutch firm, Phillips, in 1990 (Annex Table 1 and
Wilkins 2005, p. 247). Why so? In other words, what has prevented the companies that have led Italy’s
catch-up in the course of the 20th century – which has been nothing short of extraordinary – from building a
sizeable presence in the world’s largest market?
A roadmap to this paper. In the next section we present a battery of different data on outward FDI from
Italy and inward FDI in the United States, not so much in view of being completely accurate – a
notoriously impossible task with international business and investment statistics – but rather to highlight
some underlying trends. We then divide the 20th century into five periods: until World War I, the intra-war
years, 1945-1962, 1963-1992, and after 1992. While 1914 and 1939 are obvious global milestones, the
others are more specific to Italy – in 1962 the electricity industry was nationalized and in 1992 Italy last
devalued and launched a far-reaching, albeit incomplete, program of economic reforms. Following the
framework used by Mira Wilkins in her seminal work on foreign multinationals in the United States, for
each period we analyze concrete and precise case-studies on who entered, who stayed out, who endured,
and who failed. We reconstruct the strategy, scope and managerial structure of the commitment to America
of Italian largest corporations (Fiat, Pirelli, Montecatini, Snia Viscosa, Banca Commerciale Italiana,
Credito Italiano, Generali, etc.) and gauge their commercial, industrial and financial performance. We
highlight a number of factors that set the Italian experience apart from that of other large European nations:
• the presence of a huge American-Italian population and the possibility to tap into a huge reservoir
of potential consumers and professionals;
• the favour that Italian goods registered in the American markets;
• the fascination that the American model arouse in the minds of leading Italian business figures;
• the inability of Italian big business in manufacturing and finance to accumulate the necessary
ownership advantage to justify outward investment;
• the lack of Italian free-standing companies and major mining corporations interested in exploiting
U.S. abundant natural resources;
• the shallow financial and governance situation of Italian big business in manufacturing which by
and large prevented the realization of outward investment strategies aimed at acquiring new
capabilities and resources;
• the fact that Italy fought World War II on the wrong side did not make things easier, but the
consistent and possibly unmatched alignment of Rome with Washington during the long Cold War
did not help either.
In 1908, Italy’s per capita income was only half of the United States’.1 Nonetheless, that year –
only eight years after inaugurating the Corso Dante plant in Turin – Fiat set up a subsidiary in the
United States, the first European car-maker with an American production subsidiary.2 Half a
century later, Olivetti’s acquisition of Underwood was the largest-ever foreign takeover of an
American company. And yet at 89,800 its multinationals’ combined employment in the United
States is only marginally larger than that of Phillips. In 1988, the International Directory of
Company Histories included more than one Italian entry for one sector only (Financial ServicesBanks).3
Why so? Italy’s catch-up in the course of the 20th century has been nothing short of extraordinary.
While the peninsula had been the cradle of Western civilization for many centuries, by the mid1800s the slow pace of political reform, including unification, and the endurance of barriers to
trade, not only between states but also within them, had curtailed the benefits from economies of
scale and specialization. Each breakthrough of the Industrial Revolution – be it spinning, railways,
electrification, or iron – only reached Italy with a considerable lag. Since the late 1800s, however,
the pace of GDP growth accelerated and the income and wealth gap with the rest of Western
Europe closed progressively (Federico 1995). By the early 1970s, Italy had become one of the
OECD largest economies. And yet the companies that have led Italy’s catch-up in the course of
the 20th century did not build a sizeable presence in the world’s largest market.
For most of the 20th century, Italian FDI in the United States has been subject to slow increments,
despite the presence of a huge American-Italian population, the favor that Italian goods registered
in the American markets, and the fascination that the American model arouse in the minds of
leading Italian business figures. The immense size of the investment opportunities drew savings
from most of the developed economies of Western Europe, but Italian big business in
manufacturing and finance never managed to accumulate the necessary ownership advantage. The
possibilities of exploiting U.S. abundant natural resources were also meager, as Italy did not have
any major company in this industry, with the exception of state-owned oil giant ENI. Italy had no
free-standing companies and this also meant that FDI flows remained trivial. Italian governments
suspected business leaders of unpatriotic sentiments and maintained restrictions on capital
investment and more generally a negative attitude towards outward FDI, including by state-owned
enterprises. Finally, the fact that Italy fought World War II on the wrong side did not make things
According to the Maddison database, GDP per capita was US$4,451 in the United States and US$2,228 in Italy
(International Geary-Khamis dollars at 1990 purchasing power).
Berger (2001) has no mention of Fiat in 1908 but instead lists Rolls-Royce as forming a division to manufacture
autos in the United States in 1919. We thank Professor Bruce Pietrykowski, Director, Center for the Study of
Automotive Heritage, University of Michigan-Dearborn for helping us on this.
This publication provides the historical profile of the 1,200 world’s largest and most important companies, meeting
minimum criteria for size (more than US$2 billion in annual sales in 1988; a minimum of US$30 billion in assets for
banks) and of influence in respective industries and geographical locations. Banca Commerciale Italiana and Credito
Italiano were the two Italian banks, alongside Fiat, Montedison, and IRI. There were no Italian entries not only in
high-tech industries such as aerospace, drugs and electrical & electronics, but even in food products & services,
beverages. The 2004 edition includes multiples entries for the so-called “made in Italy” sectors (fashion, furniture,
etc.) as well some leading Italian specialised suppliers (e.g. in machinery and equipment industries).
easier, but the consistent and possibly unmatched alignment of Rome with Washington during the
long Cold War did not help either.
In this paper we aim at filling, albeit in a very modest way, a number of holes in the literature.
While the literature on foreign capital in Italy is very rich, and a few papers have been written on
the specificities of American investment in Italy,4 historical research on Italian multinationals in
general is still very scant5. Moreover, there are not, to our knowledge, any studies on Italian direct
investment in the US. Some corporate histories devote a few pages, if not lines, to American
investments – but, even the most important acquisition ever, that of Underwood by Olivetti, has
not been covered in a monograph.
We divide the 20th century into five periods: until World War I, the intra-war years, 1945-1962,
1963-1992, and after 1992. While 1914 and 1939 are obvious milestones, we choose 1962 as the
year in which the electricity industry was nationalized and 1992 as the one in which Italy last
devalued and launched a far-reaching, albeit incomplete, program of economic reforms.
Following the framework used by Mira Wilkins in her seminal work on foreign multinationals in
the United States,6 for each period, after initial generalizations, we introduce a section on Fiat (as
the prominent Italian business) and then analyze concrete and precise case-studies on who
entered, who stayed out, who endured, and who failed. We also highlight a number of factors that
set the Italian experience apart from that of other large European nations:
• the presence of a huge American-Italian population and the possibility to tap into a huge
reservoir of potential consumers and professionals;
• the favour that Italian goods registered in the American markets;
• the fascination that the American model arouse in the minds of leading Italian business
• the inability of Italian big business in manufacturing and finance to accumulate the
necessary ownership advantage to justify outward investment;
• the lack of Italian free-standing companies and major mining corporations interested in
exploiting U.S. abundant natural resources;
• the shallow financial and governance situation of Italian big business in manufacturing
which by and large prevented the realization of outward investment strategies aimed at
acquiring new capabilities and resources;
• the fact that Italy fought World War II on the wrong side did not make things easier, but
the consistent and possibly unmatched alignment of Rome with Washington during the
long Cold War did not help either.
In the conclusions, we analyze qualitatively the contribution of American operations on the
commercial, industrial, technological and financial performance of Italy’s largest corporations
(Fiat, Pirelli, Montecatini, Olivetti, SNIA Viscosa, Banca Commerciale Italiana, Credito Italiano,
See Bova (1995); Colli and Scarpellini (2006); and Segreto (1996).
See Sanna Randaccio (1985).
Wilkins (1985), (1989), and (2004).
Generali, etc.).7 We also try to understand the extent to which they transferred back to Italy what
they learnt in America.
Italian Investment in America – A Note on Data
Data availability and quality are well-known limitations of any research on international
investment and obviously any attempt at taking a long-term historical view is bound to be
problematic. As Mira Wilkins warned us in a personal communication, “flow figures on FDI are
terribly, terribly suspect.” We rely on a variety of sources, none of them fully reliable or complete,
and not always consistent with each other.
Italian sources
How important has been the United States as a destination of Italian FDI? ABBIAMO I DATI
DAL 1978 INCROCIO PAESE /SETTORE]. However, balance of payment data on outward FDI
to the United States is not very desirable. 8
As far as activity data are concerned, in the mid-1970s 29 Italian manufacturing companies had an
U.S. presence through 37 affiliated companies (14 industrial, 21 commercial, 2 financial), out of a
grand total of 172 Italian multinationals (Cacace (1977) SOURCE?).9 The total number had
grown to 330 at end-1985, of which XX had operations in the United States (Onida and Viesti
As far as sales and employment of foreign subsidiaries of Italian multinationals are concerned,
these were equal to LIT8,500 billion (roughly 8.5% of total industry sales and 45% of total Italian
exports) and 360,000 people (6% of the total) in the mid-1970s (Cacace 1977). A decade later, the
latter statistics was estimated to be considerably lower (232,000 employess, roughly 5% of
domestic industrial employment) by Onida and Viesti (1987).
US sources
Quantitative data suggests that the return on assets of foreign-owned companies in the United States is consistently
lower than US-owned firms. A favorite explanation for this underperformance has stressed transfer pricing, although
Gómez and Jones point to acute problems of control and managing US affiliates as an important factor.
See: “Cenni statistici sul Movimento economico dell’Italia”, Comit, 1911-21, POI “Movimento economico
dell’Italia”, Comit, 1927-32, poi Notizie Statistiche, Credito Italiano 1912-193?, le pubblicazioni di Bachi, e di
Mortara, “ Prospettive dell’economia italiana”, Bocconi, 1921-1937, “L’economia italiana nel sessennio 1931-1936,
Banca d’Italia, Istituto Poligrafico dello Stato, Roma 1938 + ICE, Movimenti valutari, supplemento a “Informazioni
per il commercio estero”; annuari + ASSONIME. See Biagioli (1974, 1995); Acocella and Ramazzotti (1995); Falco
This compares to over 900 German multinationals or 500 French ones included in a late 1960s UN survey (see UN
How important has been Italy as a source of FDI and jobs in the United States? We started with
Wilkins (1976) long-term time series on inward FDI stock in the United States and updated them
with the figures published by the U.S. Bureau of Economic Analysis (BEA) in the Survey of
Current Business.10 In view of the increasing importance of mergers and acquisitions (as opposed
to so-called greenfield investments) in the strategy of multinational corporations, we have also
gathered some figures on this relatively new phenomenon.
The number of U.S. affiliates of Italian companies multiplied by five between 1977-1998, before
falling dramatically in 1999 for unclear reasons and rising again at a slower pace in the first few
years of the new century. In terms of assets, the year-on-year variations are often dramatic, even
discounting for the 1988 jump which was due to a revision in the BEA methodology. The picture
is similarly murky when looking at the Italian share in total foreign-held assets in the United
States. Following the rather abrupt fall in 1977-78, from 1.40% to 0.93%, the share then kept
declining to 0.56% in 1986. With the 1988 revisions, the percentage skyrocketed to 1.87 in and
then even higher to 1.96 in 1990, before falling again to pre-1988 levels.
Sales and employment figures, on the other hand, provide a more consistent story of steady
increases in absolute terms and less dramatic volatility in relative ones. Turnover has grown 12fold since 1977 and the number of jobs provided by Italian multinationals by eight times. For
sales, the relative share remained constantly above 1% between 1988-1994 (with a maximum of
1.52 in 1988 that was never matched again), fell below until 2001 and recovered afterwards.
Interestingly, the participation of Italian investors is higher for employment than for sales,
pointing to a specialization in labor-intensive sectors. Although not necessarily related, the fact
that research and development expenditures in 2005 were 18% lower than in 1999 is also
suggestive of the little penchant of Italian multinationals in the United States for capital-intensive
As far as the mode of entry is concerned, in the 1980s already Italian companies were active
players in international takeovers, either as targets or buyers, and sometimes both. The number of
Italian acquisitions rose five-fold from 13 in 1982 to 70 in 1987, with North America counting for
66 out of a total of 192 deals (UNCTC 1989, Table 11.18, p. 47). However, throughout this period
of rapid growth, the annual number of acquisitions of U.S. companies remained constant and the
proportion of U.S. acquisitions decreased. In marked contrast, acquisitions of French companies
grew in absolute terms from 1 to 19, and in relative terms from 8% to 27%. At US$ 2,421 million,
Italian investors accounted for just 2.4% of the value of publicly announced acquisitions of U.S.
firms in 1982-87 (Rosengren 1988, Table 2, p. 52).
In the following decade, the weakening of the dollar over the medium term made U.S. assets
cheaper for Italian companies. ANDREA TO COMPLETE WITH DATASTREAM DATA
BEA defines direct investment as ownership or control of 10% or more of the voting securities of a business in
another country. A company located in one country but owned or controlled by a parent company in another country
is known as an affiliate. Affiliate data used in this section are for majority-owned affiliates, i.e., those in which the
ownership stake of parent companies is more than 50%. Statistics on R&D by affiliates of foreign companies in the
United States and by foreign affiliates of U.S. MNCs and their parent companies are part of operations data obtained
from BEA's Survey of Foreign Direct Investment in the United States (FDIUS) and BEA's Survey of U.S. Direct
Investment Abroad (USDIA), respectively. Operations data exclude depository institutions and are on a fiscal-year
Italian Business in America from Independence to World War I
Italian immigrants played an important role in America’s industrial and commercial
development.11 The Bank of America, the largest bank in the country, was established in 1904 by
Amadeo Pietro Giannini in San Francisco (Bonadio 1994 and Nash 1992). Originally called the
Bank of Italy, it was the first to introduce the system of branch banking in 1919. Giannini
financed the Golden Gate Bridge and the fledgling film industry, as well as California’s aerospace
and agricultural industries. The first Italian American millionaire was Generoso Pope, who came
to America from Benevento in 1904. He began as a railroad laborer, later worked for a small
construction firm, the Colonial Sand and Stone Company, which he bought out in 1925 and turned
into the largest supplier of building materials in the country.12 Some additional data on bilateral
trade flows, plus sovereign debt
In 1901, an Italian law granted Banco di Napoli a monopoly to collect and transfer the remittances
of Italian emigrants worldwide.13 An inspectorate was set up in New York in 1906, followed by
the opening of a branch on 3 June 1909. Five years later, the branch raised LIT144 million, more
than four times the 1909 amount (Caron and Di Cosmo 1993, Table 2.4, p. 187). Moreover, no
matter how effective the American “melting pot” integration model, Italian immigrants remained
important consumers of pecorino, parmigiano and caciocavallo, tomato products and olive oil. In
fact, the United States absorbed roughly 70% of exports of pasta dura cheese (while pasta molle
cheese were sold in Europe only).14 Migrants such as Scaramelli & Co. Inc of 1924 Franklin St. in
Competition to attract the migrant flows across the North Atlantic was very rife, as European countries tried to
stimulate trade and develop the merchant marine under the national flag (Feys 2006 and Torsten Feys, personal
communication, 5 July 2007). The Italian government actively used the migrant flow of nationals to promote the
merchant marine under the national flag by giving them competitive advantages over foreign competitors. From 1880
onwards, the main companies on the Genoa/Naples/Palermo-New York/Philadelphia routes were Lloyd Sabaudo,
Navigazione Generale Italiana (which in 1910 purchased a controlling interest in Lloyd Italiano) and La Veloce
Navigazione Italiana a Vapore. The Holland America Line, that played an active role in organizing Northern
European shipping cartels, managed to draw Italians from Northern Italy to Rotterdam until the market exploded with
the establishment of direct lines. The Dutch company's fleet was too small to open direct lines although this was
considered. After WWII, Italian shipyards produced some of the fastest streamliners, such as Roma (1926), Rex and
Conte di Savoia. By 1932 the world shipping depression caused the fusion of Lloyd Sabaudo, Cosulich (that had
operated the Trieste-New York line since 1903) and Navigazione Generale Italiana with the formation of a new
company, ITALIA. In 1940 most Italian ships were taken over for military service and by 1945, few were left afloat.
The fleet was gradually rebuilt (Andrea Doria and Cristoforo Colombo), but the Andrea Doria tragedy on 25 July
1956 and the rising popularity of air travel signalled the gradual decline of transatlantic shipping. Unfortunately, the
history of Italian shipping companies is severely underdeveloped (D’Angelo and Tonizzi 2004) and we could not
analyze their presence in New York and other East Coast ports.
In the 1960s his sons Fortune and Anthony were owning two radio stations and two foreign-language newspapers—
New York’s Spanish La Prensa and Il Progresso Italo-Americano, the nation’s oldest and most influential Italianlanguage newspaper. Another brother, Generoso Jr., was publishing the weekly sex-and-scandal tabloid, National
Enquirer. See “Trial of the Popes”, Time, 7 April 1961.
The counterpart to this monopoly was the prohibition to engage in discount and credit operations with Italian
emigrants (see the text of the 1901 law (L. 1 febbraio 1901, n. 24) and the Luigi Luzzati law project of 1897 in de
Cecco 1990, pp. 864-866 and pp. 837-851).
See Movimento economico dell’Italia, 1930, p. 597.
New York (with a Boston branch and a Rome office) set up trading and distribution companies to
sell Italian products and produces in the United States – as did non-migrants, such as the
Schroeder brothers of Beach St. in New York in 1873. For alcoholic beverages, Italian
manufacturers targeted France and South America, while largely shying away from the U.S.
market.15 The predecessor company of Martini was an exception, as it exported its first crates in
New York in 1867.16
As far as “proper” FDI is concerned, Fiat was the first Italian multinational in America. The
Turinese firm gave an exclusive agency mandate to Mssrs. Keep and Tangeman in 1902 (Volpato
1992). The success that Fiat cars met after winning the American Grand Prix at Savannah,
Georgia in 1907 and the Vanderbilt Cup, as well as the need to jump over import tariffs,
convinced Giovanni Agnelli to explore the opportunity of selling in the United States. The first
Fiats – 181 of them – were imported in 1908. Around 1909 a group of American investors
established Fiat Motors Co. to build a factory at Poughkeepsie, NY to manufacture the Type 56.
The company secured a site, comprising nearly 30 acres of land, situated directly on the State
Boulevard, which runs from New York to Albany.17 The Italian involvement was initially limited
to licensing and production supervision, until the outbreak of WWI when Fiat buys out the local
partners. Fiat Motor then became the group’s trading company to buy U.S. goods and ship them to
Italy. When the USA entered the war, the plant was sold to Duesenberg Motor and later on to
Western Publishing.18
WW I entailed severe restrictions on all forms of foreign investment; outstanding FPI in the U.S.
was commandeered to fund munitions and other purchases. Then, with American entry to the war,
German FDI and other investments were commandeered by the U.S. government. Nonetheless,
U.S. aid shipments to belligerent European allies opened interesting business opportunities to
Italian animal spirits.19 In 1916, Italian-born Henry Piaggio, a timber exporter, established the
Italian American shipyard at Pascagoula, MS to build wooden ship (Bricker 2001). The hostilities
in Europe had caused an extreme shipping deficit and Piaggio, since he started two years ahead of
other shipyards in America, had ships sailing before Americans reacted to the new circumstances.
In 1917, Riccardo Gualino invested in Piaggio’s venture, leading to the formation of the
International Shipbuilding Company (ISC), which built 14 large sailing ships in Texas and five
more at Pascagoula. The American interests of Gualino’s Società marittima e Commerciale
italiana and Società di navigazione italo-americana (this one a joint venture with Giovanni
Agnelli) extended to the Marine & Commerce Corp. of America, which managed Italian coal
In the first half of 1922, for instance, Argentina accounted for 37% of Cinzano total vermouth output (other than in
Buenos Aires, the Turinese firm also had plants in France, Spain, and Belgium). See “Società Anonima Cinzano,” in
ASBI, Consorzio sovvenzioni sui valori industriali, pratt. No. 688, fasc. 7, p. 29 (August 1922). Following the end of
Prohibition, total Italian vermouth exports to the United States exploded suddenly in 1934, reaching 35,128 bottles
from 158 in 1932 and 7,664 in 1933, before losing steam to 25,410 in 1936 (Banca d’Italia 1938, Table III, p. 440).
In 1922, the company officially became known as Martini, except in the United States where they were compelled
to keep Martini & Rossi because Martini was already an American cocktail.
On The New York Times, the article appeared in the Sporting News section (“Fiat Cars to Be Built Here,” 25 July
During the early 1990s, the publishing house moved out and the building was torn down.
See “Lettera di Bonaldo Stringher a Domenico Gidoni, 6 maggio 1917”, in Toniolo (1989), pp. 250-253.
imports from the United States, and the Sniacoal and M&C Pocahontas mines. In 1920 the mines
were offered on sale for US$2 million, while ISC and M&C were under liquidation in 1921, as
they owned SNIA more than US$8,330,000 versus an expected realization value of
US$4,100,000.20 M&C did not survive the liquidation procedures, went bankrupt, and creditors
managed to recover 10% only of their claims (Chiapparino 1996). Ansaldo also created a New
York branch to manage closely its shipments of equipment and components (amounting to 70,000
tons in 1917-18) (Fasce 2004, p. 76).
Italian Business in America between the Wars
By the end of World War I, the United States had turned into a net creditor. Inward flows of FDI
and FPI somewhat recovered in the following decade, as economic and financial order returned to
Europe and U.S. growth was energized by electrification and the automobile, but were subject to
radically evolving war debt repayment and currency restrictions. The United States remained
Italy’s largest trading partner between 1915-193021, making it crucial to ensure adequate access to
hard currency payment means. Although tariffs and aggressive local competition made exporting
to the U.S. market increasingly difficult.22 FDI was equally challenging and many if not most
European companies failed in the attempt.23 These predicaments worsened with the brutal 19291933 downturn, the collapse of the banking system and the devaluation of the dollar. Inward
foreign investment recovered in 1933-1939, under the parallel (but unrelated) influence of the
Hawley-Smoot Tariff Act and the search by European investors of a safe haven from autarkic and
confiscatory regimes.
Skepticism prevailed concerning the future prospects of Italian industry. According to Corrado
Gini, in an appendix to McGuire (1927), “unless unforeseen circumstances arise, or unless foreign
capital comes forward liberally, it is difficult to forecast for the near future any appreciable
improvement in the economic conditions of Italian people” (p. 564). And yet, the Italian industry
car flourished after the end of hostilities, as the domestic market recovered and exports boomed.24
Fiat considered a merger with Nash Motor Company, but this did not materialize.25 An
entrepreneurial Italian immigrant, Commendatore Franck M. Ferrari, brokered a deal with Lancia
in 1921 to sell his cars in New York and in 1925 established Lancia Motor Sales Corp. (Amatori
Archivio Storico Banca d’Italia (henceforth ASBI), Consorzio sovvenzioni su valori industriali, cart. 353, fasc. 2, p.
92ff (27 July 1921).
See “Cenni statistici sul Movimento economico dell’Italia”, 1911-21; “Movimento economico dell’Italia”, 192732; Banca d’Italia (1938); D’Alessandro (1998).
In 1922 the Fordney McCumber Act increased import duties from 27% to 38.5% of the goods’ value. McGuire
1927 also highlighted that “the extent to which Italy’s foreign trade in the higher forms of manufacture may be
expanded depends upon factors which are by no means entirely within her own control” (p. 234) and that “the tariff
legislation of the United States, in particular, places heavy duties upon Italian mosaics, ceramic wares, carved and cut
marble, woodwork, metal work, tapestries and the like, unless a certificate can be presented to prove that the objects
have been executed with designs of artists of United States citizenship, or are genuine works of art, according to
expert opinion, or, finally, are more than 100 years old” (p. 235).
In tires, for instance, Michelin closed in 1930 its (1907) New Jersey plant; Dunlop, which entered in the early
1920s, kept producing in spite of losses (even huge) which continued for decades. See Wilkins (2004)
In 1922, 69% of production was exported, a never to be matched level (Canestrini 1968).
1996). One year later, he secured the rights to produce them in the United States, importing
Lancia engines. To this end, he established Lancia Motors of America, with a US$3 million
capital (roughly equal to that of the Italian company when it was established as a plc in 1930) to
take over the old Fiat plant in Poughkeepsie. Ferrari, who died in 1929, was apparently an
impostor and the company never became operational.26
Italy acquired an important international leadership in synthetic fibers, a high-tech sector where
European companies were out-competing American ones. They found it expedient to directly
invest in the United States, to the point of turning rayon into “an American industry that foreignbased multinationals created” (Wilkins 2005, p. 152). The two leading Italian firms were Turinbased SNIA Viscosa, created in 1917 as a maritime company and later converted into fibers
manufacturing, and La Soie de Châtillon, a distant second-largest, created by Marco Biroli in
1918 (with Banca Commerciale Italiana-BCI backing) to exploit a US patent.
SNIA established two American subsidiaries in late 1920, Industrial Fibre of America and
Commercial Fibre, to produce and distribute artificial fiber, respectively. In 1924, the Cleveland
plant produced pound 2m, SHARE?, while the trading arm also distributed Italian-made fibers in
the United States.27 The American presence was curtailed in 1924 when Industrial was merged
with another American-owned company and became Industrial Rayon, in which the Italians
maintained a minority stake.28 In 1925, with support from Blair & Co., SNIA raised LIT240
million by selling 600,000 shares on the NYSE (Spadoni 2003, p. 70). In 1927, consortium of
foreign competitors led by Courtaulds and Glanzstoff, keen to control SNIA’s short-fiber
technology, proprietary equipment, and U.S. market share, acquired a relevant stake, although
Gualino maintained managerial control.29 In the same period, Gualino also launched another
ambitious venture in hat production, SALPA, to apply an exclusive patent on leather regeneration.
The construction of three plants was started in 1929 in Italy, the United States and France, with an
annual planned production of LIT100 million, US$10 million, and FFR140 million,
respectively.30 SALPA, however, was hit by the Wall Street crash and the investment rapidly
evaporated.31 In those same years, Gualino also tried to create a large Italian food concern capable
of competing internationally. UNICA controlled Cinzano, Florio and other beverages companies,
as well as Tobler, the Swiss chocolate company with factories in Bern and Bordeaux. Gualino was
ultimately imprisoned in January 1931 and soon afterwards confined to Lipari for two years.
“Podestà a Stringher,” in ASBI, Direttorio, Introna, cart. 23, fasc. 1, pp. 165-167 (28 March 1929).
See Spadoni 2003 (p. 54) and Wilkins 2004 (fn. 95, p. 712). On 24 May 1924, however, the Banca d’Italia delegate
in New York wrote to Rome that the exact daily production figures were in the pound 4,000-to-6,000 range (see
ASBI, Consorzio sovvenzioni su valori industriali, cart. 353, fasc. 2, p. 521).
In 1924 according to Orsi, in 1925 according to Wilkins (2004). Gualino bought out the original American partners
in mid-1924 and then sold a majority stake to Emmanuel Gerli Corporation for around US$2 million. Gerli had been a
director of Italian Discount & Trust in 1921 (Falchero 1990, fn. 61, p. 167). In 1925, SNIA also took over from Villa
& Brothers a plant in New Jersey that was used to elaborate Italy-imported fibres (see ASBI, Consorzio sovvenzioni
su valori industriali, cart. 353, fasc. 2, p. 519)
In 1924-28, Italy was the largest exporter of artificial fibres to the United States (Coleman cit in Orsi, p. 19).
Control over SNIA Viscosa went back to Italian control in early 1930s.
“Copia della memoria consegnata dall’avv. Gualino al capo del Governo. Documento No. 2: Memoria sulla
General SALPA Limited,” in ASBI, Direttorio, Introna, cart. 30, fasc. 1, sfasc. 7 (14 October 1929).
“Stringher a Mosconi,” in ASBI, Direttorio, Stringher, cart. 17, doc. 4 (25 May to 4 June 1930).
As far as Châtillon is concerned, following the 1926 takeover by BCI, in 1928 it partnered with
Tubize to establish American Châtillon in Rome, GA, to jump over 45% ad valorem U.S. import
duties.32 The experience, however, proved short-lived as Châtillon did not have the necessary
financial strength to compete against American firms, a point stressed by CEO Ugo Mancini in
the 1946 Costituente hearings.33 This led to the merger of the U.S. subsidiary with Tubize in 1930,
which in turn was to eventually merge with Celanese.34 American Châtillon was also very
competitive in the fabrication of specialized equipment, which it sold to various competitors.35
The rest of the Italian chemical industry abroad remained very modest in size and
Another firm to list on the NYSE was Pirelli in January 1929.36 37 The company was already
collaborating with a long list of American firms – including Western Electric, ITT, Standard Oil,
and General Electric – both in Italy and in South America (Anelli et al. 1985, 32-3).38 In 192x
Pirelli granted a licence to General Electric Co. of New York to produce half of the fluid oil hightension cables from Pirelli’s patent design (while the other half of the cable was manufactured in
Milan) to be installed in the USA39. The expansion of the electric cables business did not push
To celebrate and remind Georgian Romans of their etymological ancestry, Benito Mussolini sent a piece of
Coliseum’s walls to be used as cornerstone for a bronze she-wolf, suckling two bronze infants. See “Rome to Rome”,
Time, 15 July 1929.
“Interrogatorio del dott. Ugo Mancini”, in Commissione economico della Costituente, Industria, Appendice alla
relazione. Interrogatori, vol. 2, p. 215, 30 March 1946. In fact, as a BCI company Chatillon effectively fell under IRI
control in 1934 and the new owners tried immediately to sell it to foreign investors and raise hard currency. See “Lo
smobilizzo della Chatillon,” Archivio Storico IRI (henceforth ASIRI), s3-fl. 5.1, p. 1 (7 May 1935).
In 1928-30, SICMI had LIT600,000 in American Tubize Chatillon Corporation shares. In 1922, American Italian
Commercial Corporation shares accounted for 49% of SICMI non-banking assets (Confalonieri 1994, Table 23, p.
“Interrogatorio del dott. Ugo Mancini”, cit., p. 216.
Pirelli (founded in 1872) started production of insulated electrical conductors in the last quarter of the 19th century.
In this high-tech sector, it established itself as the only Italian firm in the field and one of the few European ones. In
1900, Pirelli mastered a conductor technology similar to the one exploited by Anglo-American competitors and was
probably superior in the field of high tension cables (selling its patents on the U.S. market). In the early 1910s,
exports amounted to over 30% of total turnover, 15% of which were in the United States. See Bezza (1987) and
Montenegro (1993).
As stated in the previous section, SNIA and not Pirelli, was the first Italian company on the NYSE, contrary to the
version in Anelli et al. 1985, p. 41. In 1930, Italian securities admitted to the NYSE included Pirelli, Montecatini,
Italian Edison, Fiat, Adriatica, Meridionale and others (“Stockbroker Abroad,” Time, 21 April 1930, on a visit to Italy
of retiring NYSE president Edward Henry Harriman Simmons). At end-December 1935, Pirelli filed on Form 21 with
the Securities and Exchange Commission for the permanent registration of US$928,000 of 7% convertible gold bonds
due on 1 May 1952 on the NYSE (“Italian Company Files with the SEC,” The New York Times, 28 December 1935).
It sought NYSE permanent registration a few months later (“Pirelli of Italy Files with SEC,” ibid., 13 May 1936).
In 1933, Pirelli and United States Robber Export Co. Ltd. established a joint venture (Pirelli-Revere-Società Italo
Americana Filo Elastico) that integrated an international group of producers, also including Turin-based Fabbriche
Riunite Industriale Gomma, British Dunlop, and Ungarische Gummiwarenfabrik. See “Pirelli-Revere,” in ASBI,
Rapporti con l’estero, pratt. No. 75, fasc. 3, pp. 260-1 (11 August 1933).
This new type of cable was installed in the second half of the 1920s in Chicago (for Commonwealth Edison) and
New York (for New York Edison). Other agreements were also signed with American cable and phone companies.
On the basis of a pre-existing technical and productive partnership (dating to the late 1880s), Pirelli formed a
Pirelli to produce directly in the United States, as it did in Britain as result of similar agreement
with local partners.40 In the United States, complex pre-existing market hierarchies in the
integrated structure of the national electrical industry made it difficult for independent actors to
produce and sell locally.41 Pirelli preferred to wave on a series of production and supply
agreements, as well as long-term investment in in-house research, to develop distinctive
ownership advantages and the technological and organizational capabilities to transfer and add
value on foreign markets. In the tire business, on the other hand, Pirelli suffered from the
technological gap and exports to America were abandoned.42 In fact, and despite its vast network
of foreign plants – which numbered XX in 1929, at the time of the listing, in six countries (Spain,
Britain, France, Argentina, Brazil, and Belgium) – Pirelli tires were not sold in the USA until
195x. The capital outlay to open a vast network of “agenzie stabili” (permanent agencies) in the
United States was huge and other initiatives abroad were given higher priority (Pirelli 1919). It is
also important to bear in mind that at the time Pirelli energies were focused on the “crucial”
British market.43
Banking could potentially offer interesting opportunities (Tschoegl 2002). Soon after the
establishment of the New York State Banking Department in 1851, Canadian banks entered the
New York market. Laws allowing foreign banks to operate New York agencies were introduced
in 1910, although it was only in 1961 that full branches were authorized. The main focus of
business was servicing the U.S. financial needs of customers with whom foreign banks had
relationships in their home countries, while also trying to drain liquidity on U.S. financial
markets. For Italian institutes, intermediation of migrants’ remittances and savings was an even
more important activity, alongside trade financing (especially for buying American goods).
The first Italian bank to operate after the war was a joint venture between the “italianissima”
Banca Italiana di Sconto (BSI) and Guaranty Trust, Italian Discount and Trust, which in fact had
been established already in July 1918 (Falchero 1990). At the time, BIS (backed by Ansaldo
group and then Prime Minister Francesco Saverio Nitti) was trying to establish itself as the Italian
syndicate in 1920 with Western Electric to enlarge and reorganize the Italian telephonic network. SIRTI (Italian
Interurban Telephone Network Company, a joint venture between Pirelli and ITT) was established in 1921 to manage
the network. See Bezza (1987) and Montenegro (1993).
Pirelli General Cable Works Ltd (a joint venture with General Electric Company of London established in 1913)
operated a plant for cable and conductor production in Southampton; a British trading company had been established
in 1909 to sell Pirelli products and source raw materials for the whole group. See Bezza (1987).
Big manufacturers, interconnected through cross shareholdings with public utilities corporations, controlled a
network of suppliers (see Bezza 1987).
Pirelli’s production of automobile tires began in 1906 and rapidly gathered momentum as domestic demand
accelerated, especially for Fiat cars. During the War, Italian armed forces needs had an enormous impact on Pirelli’s
tire production, leading Pirelli to invest in new research laboratories, rubber plantations, the distribution network, and
new cost-saving work methods. Italy’s share in world tire trade rose from 7% in 1920 to 13% in 1924. Tires rose from
¼ of Pirelli’s total turnover before WWI (vs. ½ for cables and conductors) to 47% at the end of the 1920s (vs. 33% for
cables and conductors); about 40% of total output was exported. See Montenegro (1993).
Pirelli looked at the British market as ‘the most competitive in the world’ (where the leading American tyre
producers were also investing). The pressure to invest there also came from the high British customs tariffs of 1927
and led to the start of a production plant in 1929 (according to Jones 1988 Pirelli Ltd in Burton-on-Trent was
established in 1924); by 1930 Pirelli already held 1.5 per cent of the British tyre market. At the end of the l930s the
tyre sector accounted for 50% of total turnover, but only 15% of the foreign activities. See Montenegro (1993).
partner of choice for American finance. Three years later, with the Italian bank in deep trouble,
the American partner exited the venture and the Italians acquired complete ownership.44
Banca Commerciale Italiana (BCI) inaugurated its New York branch in 1918, seven years after
opening in London the first foreign branch of an Italian bank (Montanari 1995), took over Lincoln
Trust Company in 1919, and also invested in Italian American Bank of San Francisco in 1920-21
(D’Alessandro 1998, fn. 85, p. 268). Both investments were liquidated in 1922 and Banca
Commerciale Italiana Trust Co. was established in New York in 1924 to support BCI in raising
loans for Italian firms. Siro Fusi, the BCI man in New York, became the main reference for Italian
companies interested in raising funds in the country (Di Quirico 2000, p. 165). In 1927 alone, BCI
Trust participated in 98 deals, of which 14 were by Italian corporate issuers,45 and made a
US$202,000 profit (D’Alessandro 1998, fn. 89, p. 269). It also engaged in trilateral trade
financing, discounting commercial paper to support Italian imports from the United States and
exports to South America (Di Quirico 2000, p. 144). In June 1928, to overcome inter-state
banking prohibitions, BCI incorporated Bancomit Corporation and raised US$1,900,000 through
an offer equal to ¼ of its stock (the remainder was underwritten by BCI, both directly and through
SICMI, a wholly-owned Swiss subsidiary that grouped BCI foreign participations).46
As migration flows were curtailed, BCI President Giuseppe Toeplitz and his young collaborators
Raffaele Mattioli and Giovanni Malagodi drew a more sophisticated strategy in the United States.
It became necessary to finance locally new investments, while the business objective became the
collection of banking deposits from the Italian diaspora to transfer them to BCI in Milan and fund
investments in Italy. In May 1928, Toeplitz went to New York to launch the Bancomit offer and
the sale of 250,000 BCI shares, with an option for another 250,000 – an initiative that met with
great immediate success but later unraveled, making it necessary for Milan to buy back the shares
(Malagodi 1984). New BCI Trust Companies were eventually established in Boston and
Philadelphia in 1929 (while the October 1929 crash put new openings in Pittsburgh and Chicago
in limbo) and agencies opened in New York following the takeover of five small banks owned by
Italian-American entrepreneurs.47 BCI Trust Co. also joined forces with Field, Glore & Co. and
Bonbright & Co. for Italian Superpower Corporation, an ambitious venture to build new
hydroelectric plants. In 1926 Italy was supplying less than 200 kilowatts per person, viz. 627
See “Rapporto del Delegato Gidoni al Governatore (Direttore Generale dell’INCE) Stringher”, in ASBI, Carte
Stringher, cart. No. 23, fasc. 3, sfasc. 2, p. 11 (15 March 1921). BIS activities were frozen in 1921 as the bank was
being liquidated. At the beginning of 1922, Italian Discount and Trust (to which the Italian parent company owed
LIT80 million) was successfully rescued (at almost no State cost) by INCE (Istituto Nazionale per i Cambi con
l’Estero), under the guidance of Stringher. Control of Italian Discount and Trust passed to INCE and then in June
1923 to BIS successor Banca Nazionale di Credito (acquired by Credito Italiano in 1930). See INCE (1922, 1924);
“Verbale di seduta del consiglio di amministrazione dell’INCE, 20 gennaio 1922”, in Guarino and Toniolo (1993),
pp. 262-266; Banca d’Italia (1993), 246-247.
See “Direzione centrale della Banca Commerciale Italiana a Direzione generale del Tesoro, Ministero delle
Finanze,” in ASBI, Rapporti con l’estero, cart. No. 18, fasc. 8, p. 20 (12 April 1928).
In 1928, Bancomit shares accounted for 22% of SICMI banking assets (Confalonieri 1994, Table 23, p. 59).
BCI’s intention was to confer to Bancomit Corp. shares in Italian companies held in its portfolio, but this project
was rejected by the Banca d’Italia, fearful that this could lead to profit payments abroad and a drainage on hard
currency. See “Direzione centrale,” cit. and “Stringher a Azzolini,” in ASBI, Rapporti con l’estero, cart. No. 18, fasc.
8, p. 11 (1 May 1928).
kilowatts per person in the United States in 1927.48 Bonbright’s president Landon K. Thorne (also
president of United Utilities Co. and director in half a dozen other U.S. public utilities) became
president of the US$33 million company incorporated in Delaware in January 1928. Italian
Superpower in turn had a large stake in Adriatic Electric, the parent company under the control of
Count Giuseppe Volpi di Misurata, onetime (1925-28) Italian Minister of Finance.49 In February
1930, Count Volpi together with the Mitchell, Bonbright and Field, Glore (Chicago) interests,
organized European Electric Corporation (Time, 17 February 1930).
The other Northern bank, Credito Italiano, whose Genoa branch director had been stationed in
New York during the hostilities, also considered the opportunity of opening a full-fledged agency,
before opting for establishing a lighter and much cheaper representative office in 1920
(D’Alessandro 1998, p. 266).50 While frequently in the red, the office apparently performed
important services for the bank and kept operating until 1941. For the Southern banks, the
American strategy kept focusing on migrant’s remittances. Banco di Napoli opened a second
agency in New York in 1918, alongside one in Chicago, although the government attempt to
reserve the remittances business to American banks made the environment more demanding. In
1925, Banco di Sicilia incorporated its own Trust in New York, followed by Banco di Napoli in
1930 in New York and in Chicago in 1931 (De Rosa 1980). Bank of Sicily Trust incurred
substantial losses due to non-performing loans and speculative activities and, on the aftermath of
its recapitalization under IRI supervision, was absorbed by Banco di Napoli Trust Company in
1936 (Di Quirico 2000).51
The story of the East River National Bank is somewhat different. It was bought by Amedeo
Giannini in 1918, after securing the support of the Italian Chamber of Commerce of New York,
and effectively operated as the East Coast branch of the San Francisco-based Bank of Italy.52 In
fact, Giannini and BCI competed for the same captive market of Italian migrants, as the Banca
d’Italia representative in New York wrote to Governor Bonaldo Stringher in 1928.53 Still different
the experience of Florio’s Navigazione Generale Italiana which in 1923 pondered the
“Italian Super-Power”, Time, 30 January 1928.
In 1930, Volpi-formed Compagnie Italo Belge pour Enterprises d’Electricité et d’Utilité Publique, commonly
known as Cibe, and London merchant bankers Dawnay, Day & Co. established British & International Utilities, a
corporation designed to acquire stocks in leading utilities of the British Isles and the British Empire. Volpi was
chairman; Lord Barnby of Lloyds and the Earl of Westmoreland were among the great British names on the
directorate. See “Again, ‘Cibe’”, Time, 16 June 1930.
One year later Credito Italiano, that already had various banking investments in Western Europe, opened
representations in Berlin and Paris (Confalonieri 1994, p. 726). Banco di Roma also maintained a representative
office in New York, with a much lower profile than Credito Italiano’s since the Rome institute put higher priority on
the Balkans and the Mediterranean (Di Quirico 2000, p. 144).
Other smaller banks operated in the early 1920s, including Banca Nazionale del Reduce, established in New York
in 1921 and closed in 1923, with a (partial) financial rescue of INCE (see Caron and Di Cosmo, 1993, p. 247).
To acquire East River National Bank, Giannini founded the Bancitaly Co banking holding. In 1919, Giannini also
took over Banca d’Italia Meridionale, which by 1930 had 31 branches in Italy. See ASBI, Rapporti con l’estero, cart.
No. 478, fasc. 3, p. 110 (31 March 1931).
“Podestà a Stringher,” in ASBI, Rapporti con l’estero, cart. No. 18, fasc. 8, p. 14 (10 May 1928).
transformation of its small New York office specialized in remittances transfer into a full-fledged
branch of Istituto Italiano di Credito Marittimo.54 Apparently the project did not materialize.
As regards the ability of Italian international business to cater for the demand of diaspora
consumers, new dimensions and complications emerged after WWI. The U.S. government sent
agents to Naples to explore the history of tomato canning and export to the United States, largely
because Italy’s canning industry was competing successfully with domestic canners of tomatoes
for Italian immigrant market.55 Moreover, with the notable exception of cheese, after the war “the
industries dealing with the manufacture of food products (sugar, confectionery, tomato extracts,
and so on) ha[d] shown an inability to hold their ground, much less a tendency to expand”
(McGuire 1927, p. 140). On the other hand, Mussolini’s drive for economic autarky and U.S.
immigration restrictions combined to make the United States (and Argentina) a more important
producer of Italian-style foods in the interwar years.
Distributors and retailers of cheese, pasta, canned tomatoes and other Italian products reacted with
advertisement campaigns that emphasized the higher quality of imports – sometimes resorting to
openly racist claims that American goods were produced by Negroes (sic) – and the patriotic
contribution of buying Italian-made products while the country was suffering from the sanctions
imposed by the international community (but not the United States) after the Ethiopia war (Luconi
200x). Large specialized traders developed such as Locatelli – whose offices at 24 Varick St. were
known as Locatelli Building – and which represented mother company Mattia Locatelli from
Lecco (also the Italian agent of Kraft Foods), two Locatelli-affiliated companies, six independent
Italian food producers, and three cheese companies from France, Switzerland, and Argentina.56
Galbani was one of the large Italian food companies with a U.S. sales subsidiary, whereas the
opportunity of creating export consortia was scarcely exploited.57 The American agencies of
Italian banks also played a supportive role, extending loans to importers of ethnic foods.58 The
situation was different in the case of pasta, for which exports rose between 1911-24, but then
“Gidoni a Stringher”, in ASBI, Rapporti con l’estero, cart. No. 8, fasc. 28 (10 March 1923).
Donna Gabaccia, Director, Immigration History Research Center, University of Minnesota, personal
communication, 28 November 2006.
See the company ad in the October 1946 issue of Trade with Italy, the monthly bulletin of the American Chamber
of Commerce for Trade with Italy, of which Ercole Locatelli was President in XXXX-XX. Another interesting
company was Cerruti & Cominelli, based at the same address as Buitoni (see below), that acted as the exclusive
representative for Melano & Pettigiani, a Buenos Aires cheese producer.
“Interrogatorio del sig. Ettore Piani”, in Commissione economico della Costituente, Industria, Appendice alla
relazione. Interrogatori, vol. 2, p. 235-41, 31 March 1946. The Galbani manager does not specify the nature of the
U.S. subsidiary: according to a 1938 listing of local agents of Italian exporters, Galbani was represented by Mattia
Locatelli (La Rivista Commerciale Italo-Americana, 25 June 1938). Del Gaizo Cantarsiero, a S. Giovanni a Teduccio
tomato canning and coffee roasting company, was another one with a distribution subsidiary in New York. See ASBI,
Vigilanza sulle aziende di credito, pratt. No. 8669, fasc. 13, p. 31 (9 October 1941). Bisleri Company, Inc. was the
U.S. subsidiary of Ferro-China Bisleri.
In 1939, the Italian commercial attaché in Washington warned the Banca d’Italia governor that the closure of Banco
di Napoli Trust (if Italian monetary authorities failed to meet a U.S. Banking Department request for a
recapitalization) could damage the national food industry. See “Ballerini a Azzolini,” in ASBI, Direttorio-Azzolini,
cart. 13, fasc. 10, p. 48 (11 March 1939).
shrank rapidly due to the fast development of local production.59 Nonetheless, as Donna Gabaccia
has observed, “the entire history of migration’s impact on U.S./Italian trade and investment
relations still awaits a talented researcher”.
With the establishment of IRI in 1933 and then its “perennization” in 1937, the weight of the
government sector in the Italian economy was massively reinforced.60 IRI initially targeted the
liquidation of foreign participation of banks and manufacturing firms, but once it was decided to
transform IRI into a permanent institution, foreign subsidiaries became an investment to be
assessed, not an asset to be liquidated. As far as IRI banks were concerned, BCI in particular, a
1935 document describes overseas branches as “a problem” that had to be analyzed quickly in
order to determine their strategic value and implement an appropriate policy, including by
shutting down most, if not all, of them.61 Nonetheless, progress in restructuring foreign
investment was very slow. Guglielmo Reiss Romoli, at the time possibly one of Italy’s most
prominent turnover specialists and one of Mattioli’s closest collaborators, was sent to New York
in 1935 to affect the transformation of BCI Trust (Bottiglieri 1984). In 1938, the five New York
agencies, of which three in Manhattan and one each in Brooklyn and Long Island, had 175
employees, deposits of more than US$16 million (of which slightly more than US$2.1 million
were placed with BCI in Milan), and losses of US$905,000.62 IRI management considered BCI
interests in the United States inadequate to support the group’s (and by extension the country’s)
overall development, in particular because of its excessive cost. In fact, the benefits of the
different strategy of Credito Italiano was positively mentioned in another 1938 document on IRI
banks written by Enrico Cuccia.63 Hence the decision to finalize the liquidation of the Boston
Trust, to do the same in Philadelphia, and to reduce the number of New York agencies. As these
American consumers prefer spaghetti and cut macaroni (a.k.a. elbows) which are dressed with meatballs and cedar
cheese, respectively. From tons 456 on average in 1911-13, Italian exports in the United States fell to tons 10.1 in
1928, and also decreased to almost zero in Canada (see Movimento economico, 1930, p. 595). The U.S. pasta industry
developed thanks to the support that American banks provided to Italian migrant entrepreneurs (Silvano Serventi,
personal communication, 27 November 2006). Examples include American Beauty (Kansas City, est. 1912), Price
Macaroni (Boston, est. 1912), and San Giorgio Macaroni (Pennsylvania, est. 1914).
On 23 January 1933, Law No 5 created IRI to provide an effective institutional setting for the restructuring of the
Italian banking system. IRI took over the industrial participations held by the big commercial banks and cleaned the
banking sector’s balance sheet of non-performing loans. IRI worked to reorganise technically and financially these
enterprises, offloading the shares whenever feasible. IRI grouped similar concerns under the control of new subholding companies: STET (1933) in telephony, FINMARE (1936) in shipping companies, FINSIDER (1937) in steel,
FINMECCANICA (1947) in the mechanical sector, and FINELETTRICA (1952) in the electrical sector. In 1955 IRI
accounted for 44% of Italian steel output, 80% of national capacity in shipbuilding, and 26% of total banking
deposits. IRI further enlarged its reach in the 1950s, obtaining an absolute majority of RAI (the national broadcasting
company) in 1952 and taking control of Alitalia (the national airline) in 1957. See “Daily Report on Italian Home and
Foreign Affairs”, n. 167, 27 luglio 1954, Agenzia Est-Ovest Italiana, Roma, in ASIRI, s2.4-fl.2, p. 32. See also
“Information concerning IRI, October 1949” in ASIRI, s2.4-fl.2-p. 18; “Institute for Industrial Reconstruction – IRI,”
Review of Economic Conditions in Italy, Vol. 4, No. 1, January 1950.
“Sistemazione Comit,” ASIRI, numerazione nera, busta 32 (1935).
“Memoria sulle partecipazioni estere della Comit,” ASIRI, numerazione nera, busta 40 (22 February 1938).
“Le dipendenze bancarie all’estero della Comit, del Credito e del Banco di Roma,” ASIRI, numerazione nera, busta
40 (28 April 1938). In 1930 already, BCI had 190 foreign dependencies in Argentina, Austria, Brazil, Bulgaria, Chile,
Colombia, Croatia, Czechoslovakia, Ecuador, Egypt, France (including Casablanca and Monaco), Greece, Hungary,
Poland, Peru, Romania, Switzerland, Turkey, United Kingdom, the United States, and Uruguay (see Movimento
economico dell’Italia, 1930).
actions proved insufficient to restore the viability of BCI business in the United States, especially
in view of the deteriorating international situation, by late 1939 the New York Trust had also been
sold to local investors.
When World War II broke out in 1939, the proclamation of the national emergency status worried
European investors.64 Romoli, in particular, signaled to Mattioli the need for a rapid liquidation of
BCI Trust and branch, although the more lenient treatment that the Americans reserved to the
Italians compared to the Germans meant that the shut down of the branch was postponed until
1941 (Bottiglieri 1984). In June 1941, Roosevelt froze Italian (and German) funds in the United
States and transferred to the U.S. Treasury assets held by Italian citizens and companies.
Uncertainty surrounded the exact definition of credits and investment.65 With Washington entry
into World War II on 11 December 1941, Axis investments were once again commandeered and
confiscated, again including German patent wealth. While German (and to a lesser extent
Japanese) FDI was particularly strong in chemicals where German industry was at the frontiers of
technology capabilities, Italian firms were by and large excluded from international cartel
arrangements and had scarce patent holdings66. The IRI banks branches and the Banco di Napoli
Trust closed in 1941-42, while Assicurazioni Generali of Trieste, which had opened a U.S. branch
in 1935, interrupted operations in 1944. Società Dante Alighieri, a key Italian cultural and social
institution, was banned in the United States because of its alleged fascist sympathies, and only
reopened its doors in the 1960s (Pretelli 2005).67
As Mira Wilkins has highlighted in her study of Dutch multinationals in the United States, many
German investors used the Netherlands to hide the corporate veil and shield their companies from
political risks. To offset the sanctions imposed on Italy following Mussolini’s aggressive foreign
and colonial policies, Pirelli shifted the centre of its operations from Belgium to Switzerland.68
The Allied governments recognized the Swiss status of Pirelli Holding and did not take any
In the nine months to 27 September 1939, Italy was the only country in the world, together with Germany, to
witness a fall in its short-term assets in the United States (Survey of Current Business, February 1940, Table 27, p.
49). As Senator Giovanni Agnelli told the annual stockholders’ meeting, Fiat activity in 1940 was also seriously
hindered by a U.S. decision to requisition tools ordered at the end of 1939. See “U.S. Embargo Slows Italian Arms
Plant,” The New York Times, 16 March 1941.
“Ossola a Azzolini,” in ASBI, Segreteria particolare, cart. No. 248, fasc. 1, p. 563 (15 June 1941). With the
outbreak of hostilities, the Banca d’Italia delegation in Lisbon took over the responsibility of the New York office.
In 1940, the USPTO granted more than 2,500 patents to German residents (companies and individuals), that is more
than 25 times as many as to Italians; in 1950, only 24 German patents were granted (vs. 39 to Italian nationals). In
1955 already they were 771 and 103, respectively, and five years later the gap had widened further (2,165 versus
245). See Antonelli and Barbiellini Amidei (2007).
Starting in the late 1930s, as the regime was becoming closer to Nazi Germany, some Italian multinationals quietly
sent their Jewish managers overseas to shield them from Anti-Semitism. Enrico Verona (MIO NONNO!!), for
instance, was managed the SNIA plant in Portugal; Antonello Gerbi directed the BCI operations in Peru; Pirelli’s
Mario Luzzatto was posted in London. To our knowledge there are no such examples in the United States – quite
amazingly, Reiss Romoli requested to return to Italy. Michele Sarfatti, Director, Fondazione Centro di
Documentazione Ebraica Contemporanea, personal communication, 20 August 2007.
In 1940 Pirelli Holding (founded in 1937) replaced Compagnie Internationale Pirelli S.A. (set up in 1920 in
Brussels) in managing overseas operations; in 1941 Società Italiana Pirelli was transformed in Pirelli Spa, reducing
Pirelli’s participation inside the Swiss holding below 50%, while still maintaining management control. See
International Directory of Company Histories, Vol. 15. St. James Press, 1996.
hostile measures against the foreign companies it controlled – although this was not particularly
important in the United States, as Pirelli had no subsidiaries there.
On the other hand, the war had a completely different effect on a new Italian investor,
Buitoni/Perugina. In 1937, the Perugia-based producer of pasta and fine chocolate had sent
Armando Spagnoli, a manager as well as the son of one of the founding partners, on a 6-month
trip to explore business opportunities. While products were being sold through a local agent,
Eugene J. Petrosemolo, the distribution network was poor and most outlets were in peripheral
areas and run by Italians. While falling short of considering a direct investment, Spagnoli and his
boss, Giovanni Buitoni, decided to seek potential partners interested in technical and marketing
collaborations, along the lines of the model that the firm was considering in Brazil for a
contemporary venture which, however, was not finalized. In 1938, Perugina agreed to have its
products sold at Macy’s and in a fur store on Madison Avenue. For Buitoni, earning hard currency
was crucial in order to buy cacao, as per the early 1939 agreement with the Ministero per gli
Scambi e le Valute. In 1939, Buitoni total exports in the United States reached LIT1,654,000, out
of LIT4,620,000 global exports, making it by far the largest overseas market.69 In spring 1940,
Buitoni left for New York, partly to attend the 30th anniversary celebrations of Hershey, then the
world’s largest chocolate manufacturer, partly to escape family and health problems. With
assistance by a New York lawyer, Samuel Franck, Buitoni gathered the necessary capital to open
a Buitoni pavilion at the World Fair in New York. Two American companies were created before
Italy’s June 1940 war declaration – La Bomboniera to manage the Perugina flagship store on the
corner of Fifth Avenue and 56th Street and the joint warehouse at 99, Hudson Street; and Buitoni
Spaghetti, with a US$40,000 capital of which ¾ raised among members of the Italian-American
community, to manage two pasta restaurants inside the Fair’s Amusement Area. Buitoni decided
not to return to Italy and in 1941 begun negotiations with the Italian currency authorities in view
of establishing a new affiliate, Buitoni Products, and enlarging the scale and scope of American
operations.70 The Ministry, however, refused to authorize the Perugia headquarters to support the
initiative and Buitoni decided to settle in New York, while the Buitoni/Perugina staff had to return
to Italy. Giovanni’s relationship with his brother Bruno became increasingly stranded, as the
former was not satisfied with the degree of support received from Italy, while the latter considered
the American expansion plans badly in tune with the difficulty that Buitoni was experiencing in
Italy due to the conflict.
Buitoni Foods saw the light in January 1941 with no formal links with the Italian headquarters.
Shareholders included Dario Soria, a recent Jewish immigrant who would later become a leading
figure in the New York media scene,71 and other Italian food and beverages entrepreneurs. Buitoni
ASBI, Consorzio sovvenzioni su valori industriali, cart. 46, fasc. 1, p. 56 (17 January 1949).
ASBI, Consorzio sovvenzioni su valori industriali, cart. 46, fasc. 1, p. 53 (17 January 1949).
Born in 1912, Soria migrated to the United States in 1939. During WWII he worked for the Office of War
Information, becoming a U.S. citizen in 1945. While stationed in Italy, Soria became interested in the Cetra catalogue
of recordings, which he first imported to the United States and then arranged to press under the Cetra-Soria label. By
1953, Cetra-Soria had the largest catalogue of recorded opera of any company. That year, Soria sold the label to
Capitol Records, and went to work for EMI. In 1958 he helped Gian-Carlo Menotti organize the first Festival of Two
Worlds in Spoleto and also began the Soria series for RCA Victor Records. In 1961 he became vice president of the
international department of RCA Victor Records. In 1970 he left RCA and became managing director of the
Metropolitan Opera Guild. He held that position until 1977.
run two Spaghetti bars in Times Square and Broadway, initially using pasta produced by one of its
shareholders and then buying a small plant in Jersey City, NJ. As he could not use durum wheat
and ensure the same quality of imported pasta, in order to differentiate his brand from local
competitors Buitoni developed “minus amid” hyper-protein varieties and obtained kosher
certification. The venture benefited from the fact that in 1943 government bought more macaroni,
spaghetti and egg noodles than in all the preceding 150 years of government buying (NPA
website). Perugina, on the other hand, suffered the consequences of a government decision to
claim import duties, a decision that the company disputed to no avail (Buitoni 1972, p. 98). After
the war, Buitoni Food continued to operate as an independent company until 1953, when it finally
became part of the group (see below).
Italian Business in America during the miracolo economico
During the third period, 1945–1962, Europe emerged from the war in a much weakened position
relative to the United States, whose role in the world economy seemed unchallengeable. Once
again, optimists were scarce in Italy – according to Einaudi (1955, p. 19), “Italian businessmen
seemed more anxious to keep and protect what they have built than to continue and renovate and
run the risk of continuing change”. Foreign managers lived in awe of the alleged superiority of
their U.S. peers and, insofar as American management methods seemed to provide answers to the
question of why US productivity so exceeded Europe’s, business on this side of the Atlantic
invested in adopting them. In the peculiar Italian innovative path, which also included the
Marshall plan and the start of the European integration journey, this effort rapidly bore fruits
(Antonelli and Barbiellini Amidei 2007), as this description of Milan in 1960, which sounds so
much as one of Shanghai early this century, vividly shows:
“Fifteen years ago, out of the war’s rust and wreckage, [Italian corporate managers] began
reshaping the business empires that dominate Italy’s economy today. Eschewing the torpor
that grips much of China, they built reputations for drive, long hours, impatience. Today,
their imprinting is deepening. Workmen are smashing down old buildings to make way for
skyscrapers, and burrowing beneath Milan’s ancient streets to implant a subway. A new
business center, costing a quarter of a billion dollars, is going up in central Milan.
Throughout the city, the sound of jackhammers reverberates”.72
The popularity of Italian movies such as Rossellini’s Open City and Paisan,73 no less than the
constant reminder that Italy was, at least until 1948, a first-line country in the fight against global
Communism, made the United States and American consumers increasingly Italy-conscious.
Exports to the US market rose fast during this period.74 In 1951 the first million-dollar expositionsale of Italian products after the war, featuring more than 1,000 goods, was held by Macy’s
department store in New York, Macy-affiliated stores in Newark, Atlanta, Toledo, Kansas City,
“Milan Sparks Italy’s Economic Renaissance”, Business Week, 19 November 1960 – this issue had the city view
from the Duomo on the cover page, with the Madonnina at the forefront. Also on Milan was “City on the Move,”
Time, 27 June 1960.
According to Wagstaff (1995), “in the eleven years 1946-56, Italian films won the New York Film Critic’s award
for best foreign film seven times [and] Roma città aperta played in a downtown New York cinema for over a year: no
foreign film had ever come anywhere near this record”.
See Antonelli and Barbiellini Amidei (2007); Gomellini (2004); and Gomellini and Pianta (2007).
and San Francisco, and retailers in 13 other cities that shared Macy’s foreign buying facilities.75
For some companies, this required considerable investment in setting up a sale and after-sale
business structure. In the early 1950s, Piaggio and Innocenti started exporting to the United
States, where Sears, Roebuck ordered 5,000 Italian scooters in 1952.76 In 1958 some 20,000
Vespas and Lambrettas were sold, equal to roughly ⅓ of the U.S. market.77
During the 1950s, Fiat grew at enormous speed, shielded by a set of import barriers that virtually
denied foreign producers access to the Italian market until the founding of the European
Economic Community (Fauri 1985). Moreover, Fiat managed to remain at the cutting edge of car
manufacturing technology, enabling it to expand production, foreign sales and profits. Vittorio
Valletta, Fiat’s post-World War II general manager, bet on serving the more dynamic foreign
markets from modern plants built with the help of Marshall Plan funds.78 In 1946 already, at the
Paris Conference, Valletta managed to convince Bank of America to open a credit line, a
significant signal from Giannini (Bairati 1983, p. 172).79 Valletta then started collaboration with
the law firm of Oscar Sidney Cox, of Lend-Lease fame, to lobby for Fiat in Washington.80
Although no serious thought was given to the American market – opportunities in Italy and some
European countries were abundant and the Detroit manufacturers still enjoyed an untested
financial, marketing and technological advantage in their home market – cooperation with the
United States was otherwise rich during the late 1940s and 1950s, including deals with Caltex,
Westinghouse, Lockheed, Hamilton, and T.W.A. (Bairati 1983, p. 172). On some occasions,
however, problems surged. A contract with Nash to co-produce the Cinquecento in America,
mounting American bodies on 100,000 Italian chassis, floundered because the Italian authorities
were not willing to exonerate exports from duties (Bairati 1983, p. 223);81 82 a contract to produce
“Italian Imports Spurred by Macy Fair,” Business Week, 15 September 1951. On the “discovery” of Italian style in
the United States, see Casciato (2006).
“Business Abroad Brief,” Business Week, 7 June 1952.
“Scooter Makers Tap Youth Market,” Business Week, 14 February 1959.
Fiat received US$34,286,600 in Marshall Plan assistance (Bairati 1983, p. 312). According to Gianni Agnelli, “The
Marshall Plan surely speeded up the recovery [of Fiat] and […] it gave us a certain amount of relationship with
Washington, with the official side of Washington, we worked again with the Bank of America in a big way, yes it did
have an effect, surely. Let us say, Atlanticising the Fiat outlook on the world.” See “Interview With Gianni Agnelli,”
See “Valletta a Menichella,” in ASBI, Menichella, cart. 20, fasc. 15, pp. 28-30 (2 October 1946). In the letter,
Valletta also mentioned a proposal from Kaiser Frazer to buy Fiat 1100 chassis and distribute them in the United
States. “Ckrysler” (sic) had apparently made a similar offer (see “Cigliana a Einaudi,” 25 October 1946, in ASBI,
Segreteria particolare, pratt. 89, fasc. 1, p. 64).
A government career man since 1938, Oscar Cox was defined as “the smartest damn lawyer in Washington” by
Time in 1942 (“Roll of Honor,” 10 August 1942). On 14 July 1948, when Communist Party leader Palmiro Togliatti
was shot in Rome and workers seized the Mirafiori plant in Turin, Cox was in a meeting with Valletta. Cox was
eventually allowed to leave, while Valletta was held hostage for 48 hours (Bairati 1983, p. 199). Cox was also the
technical advisor to the Delegazione tecnica italiana (Deltec), a body set up by the Bonomi government in
Washington in April 1945 to accompany decisions on American support to the reconstruction. In this guise he drafted
the 1947 Exim bank loan (Segreto 2000). Cox also advised Olivetti in 1959 on the antitrust implications of the
Underwood takeover (see Ochetto 1985, p. 290).
See “Valletta a Menichella,” in ASBI, Menichella, cart. 49, fasc. 55, pp. 16-19 (28 Dicember 1948).
offshore the F86K fighter took three years to negotiate and was only signed in 1955 after the
internal workers’ council elections saw the defeat of the Communist trade union CGIL (Bairati
1983, p. 264).
Having watched with green-eyed envy the success of Volkswagen in the US market, in 1957 Fiat
made an arrangement with Hoffman Motors to introduce two small cars (the little Seicento and
the four-cylinder Millecento) in New York and Los Angeles and started considering the launch of
its ultra-small Cinquecento.83 Fiat Motor Company Inc. was the successor to Servofide, a
company established in 1955 to provide after-sale services for Fiat sea engines (Tesi 2005). In
April 1958, Fiat authorized the sale of US$38 million in additional common stock and US$38
million in bonds to finance new expansion, “much of which revolve[d] about these two
projects”.84 While Fiat – which by then had 15 plants outside Italy85– did not consider the
possibility of an American plant, it invested US$1 million to set up its own spare parts centers on
both Coasts. Conscious of the problems that European exporters were experiencing due to
stretched shipping capacity on the North Atlantic, Fiat converted one of the ships owned by its
subsidiary Italnavi into a floating garage. Some successes were registered, but sales never
exceeded the 50,000 mark reached in 1960.86
For a decade after the end of the war, Italy’s largest exporter to the United States was Necchi.
Founded in 1919, the Pavia-based sewing company invaded the U.S. market in 1948 with a new
sewing machine “so capable it can sew two or four-hole buttons on a dress in a matter of
seconds”.87 Though from US$25 to US$60 more expensive than a Singer, Necchi conquered more
than 5% of the U.S. market – for almost a century Singer’s chasse gardée. This thanks to a
combination of product innovation – a needle that zigzagged as it sewed – and the introduction of
six assembly lines, tooled with semi-automatic milling machines and interchangeable parts, by
veteran Olivetti manager Gino Martinoli.88 As Time wrote at the time, “by such ingenuity and
attention to the housewife’s convenience, Necchi has already become one of the biggest dollarearners for Italy. But Necchi has done something even more important; it has proved to skeptical
Italians that U.S. production methods will work as well in Italy as in the U.S.”89 Necchi’s success
in American owed a lot to the determination of Leon Jolson, a Polish concentration camp survivor
In 1950, Nash signed a contact with Pinin Farina to produce sport cars in Turin using Nash Healey’s chassis and
engine (Castronovo 2005, pp. 52-53).
Foreign cars sales had hit 100,000 the previous year as the increasingly affluent middle class started buying second
and third family cars.
“Fiat Stacks Its Chips on Small-Car Market,” Business Week, 27 July 1957.
“Milan Sparks”, cit..
“A victory for Fiat,” Business Week, XX YY 1967. Still, this was well above the 30,000 threshold that Valletta had
set in 1956 with Vincent Garibaldi, the Fiat representative in New York, as the maximum level to avoid steering the
attention of American competitors, always ready to call for protectionist measures (Bairati 1983, p. 313).
“New Machine Adds Speed to Sewing,” The New York Times, 21 May 1949.
At the time, less than ten major Italian firms were using assembly lines, but Martinoli refused to believe that US
methods could not be applied in Italy (Martinoli 1961). As a consultant, he hired N. Richard Miller, a 32-year old
Harvard Business School graduate and production expert, to revamp production.
“Zigzag to Success,” 26 July 1954. In 1953, Olivetti machines earned Italy more dollars (US$2.4 million) than any
other mechanical export except Necchi sewing machines. “Thinker from Ivrea,” Time, 8 February 1954
who emigrated to the United States in 1945, saw the possibilities of the zigzag sewing model, and
borrowed US$2,000 from the United Service for New Americans to import the first four Necchi
machines in 1948.90 Jolson had done business with Necchi in Poland. By 1952 he owned a twelvestory New York building, was advertising to the tune of a million dollars a year, and had 1,630
U.S. dealers and a subsidiary in Canada. He became a U.S. citizen in 1952 and in gratitude gave
US$10,000 to Columbia University’s Teachers College for fellowships for other refugees.
Buitoni started freezing lasagne, ravioli, macaroni and cheese in the United States in 1950. In
summer 1952, a huge new building was inaugurated in South Hackensack, NJ. The US$1.5
million investment was devoted to pasta production but could be extended to frozen foods if
needed (Bova 1996). Jo DiMaggio, the retired New York Yankees star, was hired to push the
Buitoni macaroni dinners in supermarkets and appointed vice president in charge of public
relations on the West Coast. That year the Buitoni family and the company managers met in Paris
for a nine-day meeting to discuss the future of the business, by then spread between Umbria,
Rome, France and the United States. The outcome was the creation of International Buitoni
Organization in 1953 or 1954, although the new structure did not solve the problem of
coordinating managerial decisions in a family-owned, multinational enterprise of Buitoni’s size
(Pencelli 1997). Also in the food industry, the United States became by far the largest single
market for Motta, that by 1956 was responsible for a third of Italy’s exports of sweets and
candies. Nonetheless, the Milanese firm, famous for its panettoni, did not set up a plant there,
limiting its U.S. presence to distribution (Motta Inc. in New York) and investing instead in a plant
in Lima (Colli 2000, pp. 602-3).
A sector where Italy was developing strong technological capabilities was chemicals.91 From the
1920s onwards, Montecatini became increasingly involved in inorganic chemistry, reaching in the
1940 dimensions comparable to those of the main foreign competitors, although with almost no
international reach.92 In 1953, with financial aid from Montecatini, Giulio Natta discovered new
classes of polymers with a sterically ordered structure.93 This discovery led to the realization of a
thermoplastic material, isotactic polypropylene, which Montecatini started producing on an
industrial scale in 1957 in Ferrara.94 This product was marketed successfully as a plastic material,
“No. 32164”, Time, 21 April 1952.
For the first few years after the war, U.S. companies maintained an unchallenged industrial and technological
leadership in petroleum refining and petrochemicals. See “Missione italiana negli Stati Uniti per lo studio della
gomma sintetica, agosto-settembre 1951,” ASIRI, numerazione rossa – Pratiche societarie, G.S. Gomma Sintetica –
Milano, faldone 62, 3. See also Morandi (1952).
See “Relazioni e Bilancio, 1940, 53° esercizio, Montecatini,” in ASBI, Ispettorato del credito, pratt. N. 742, fasc.
Montecatini had been established in 1888 to exploit a copper mine, before entering the chemical industry in the
1910s. In 1921, Giacomo Fauser had built a small pilot unit for ammonia synthesis leading Montecatini to build the
first Fauser ammonia plant and starting it in 1923. In 1925 Montecatini decided to license directly the Fauser process,
through a Belgian subsidiary, Ammoniaque Synthétique et Dérivés (ASED), jointly owned with Evence Coppée, a
large engineering contractor in the field of coke oven plants and related installations. Montecatini reserved the Italian
market for itself but neglected exports (van Rooij 2005).
In 1953/54, at the Max-Planck-Institute for Coal Research in Mülheim, Karl Ziegler and co-workers discovered a
significantly improved process for the production of polyethylene with a high crystalline content. In 1963 Natta was
awarded the Nobel Prize jointly with Ziegler. According to Martin (2007), the roots of these achievements can be
traced back to the research results which Natta had previously accessed at Mülheim.
by the name of Moplen, as a synthetic fiber, by the name of Meraklon, as a monofilament by the
name of Merakrin and as packing film, by the name of Moplefan. Natta’s discoveries opened to
Montecatini the possibility of developing industrial initiatives on the base of its own technological
acquaintances, and not merely through the acquisition of licences and patents (often with
exploitation limits). In the new petrochemical technological trajectory emerging on a world-wide
level, Montecatini was marketing textile-cut staple fibre in Italy at roughly half the going price in
the United States.95
Although management’s eyes were focused on a national strategy of diversification and vertical
integration, in 1955 Montecatini decided to explore overseas investment opportunities and zeroed
in on the United States (Amatori and Bezza 1990, pp. 346-49). The logic of investing in the
world’s most advanced market was not clear, as the management considered a direct production
presence a prerequisite for listing Montecatini on the NYSE and extending its patents in the USA.
Montecatini was listed in New York in February 1957, although the share price soon started
suffering from the company specific problems (Fauri 200096) and also a general “Italian corporate
governance discount” (Barbiellini Amidei and Impenna 1999). Broadened prestige was seen to
drive management as much as bigger dollar earnings.97 Financing for the investment was expected
from a pool of New York and Swiss banks (being aware not to divert abroad “scarce” Italian
funding), but a new Treasury Minister in Rome denied the necessary permission and the new
company was born with a much reduced capital than anticipated.98 In fact, because of the
country’s chronic scarcity of capitals and currency, the Italian government resisted “the initiative
of creation of a plant for the production of plastics in the United States” on two grounds, namely
“the foreign currency program” and “the export program”.99 Even if financing was being raised on
foreign financial markets (essentially Switzerland), firm engagements were requested in terms of
the forecasted dollar earnings coverage of the financial burden and the reimbursement of the
capital. As far as the “export program” was concerned, Montecatini was adamant that
“undoubtedly the volume of our exports will maintain its course, progressively increasing” and
that exports would experience “an ulterior increase as consequence of the activity that we are
ready to carry out in the United States”. To allay government’s fear of export substitution and
crowding out of Italy-based production, management explained that the subsidiary would sell
“many products manufactured in Italy”, use “intermediate manufactured goods produced in Italy”,
and transfer licenses and sign patent concession agreements with U.S. enterprises.
“Italy Gets Fiber at Half U.S. Rate,” The New York Times, 24 September 1959.
Despite its dominant position in inorganic chemicals and fertilizes, Montecatini’s quasi-monopoly of traditional
chemicals was soon challenged, first by the ENI and then by Edison, one of Italy’s giant electric power companies,
which was diversifying into new sectors, foreseeing nationalisation of electrical industry. The ‘chemical wars’ of the
late 1950s and early 1960s pitted the three companies against one another, as they competed for state support by
building plants in the Mezzogiorno, often with little commercial rationale (Fauri 2000).
“An Italian Colossus Turns to World Markets,” Business Week, 18 August 1956.
See “Lettera della Montecatini al Gov. Menichella,” in ASBI, Direttorio-Menichella, cart. 32, fasc. 55 (28 April
“Progetto per la creazione di uno stabilimento per la fabbricazione di materie plastiche negli Stati Uniti – appunto
della Montecatini al Ministero del Commercio con l’Estero,” in ASBI, Direttorio-Menichella, cart. 32, fasc. 55 (12
June 1956).
In 1959, after a two-year suspension of the investment plan, Montecatini sold US$10 million 5
1/2% sinking fund dollar debentures due 1979 and warrants for capital shares. The net proceeds
were applied to the construction of a plant for the manufacture of isotactic polypropylene
(marketed in Italy under the trade name Moplen) and other petrochemicals. Novamont, a whollyowned subsidiary incorporated in Delaware, owned and operated the plant near Charleston, WV,
on land that Novamont acquired.100 The plant was inaugurated in late 1961 and doubled in size in
1965-67 (CESPE 1971). uno stabilimento a Neal, WV è a 60 miglia di distanza da Charleston ...
Operating the wholly-owned subsidiary was not necessarily a willing choice, since Montecatini
had previously looked for an American partner to produce and market its wares in the USA.
Negotiations with Olin Mathieson (at the time America’s fifth-largest chemical enterprise), started
under the advice and the auspices of Mediobanca, but failed to produce an agreement. Despite a
marketing agreement signed by Montecatini U.S. representative, Chemore, with W.R. Grace &
Co.,101 Novamont’s underdeveloped sale network was to constitute a problem, especially as the
incapacity to smoothly patent polypropylene in the US and the resulting rapid (and cheaper)
imitation by mostly American competitors diminished the reward from innovation (Walsh 1979,
cited by Saviotti 1991, and McMillan 1979). Hercules (with which Montedison partnered in the
1980s in its short-lived international resurrection) and Standard Oil were able to introduce crucial
incremental innovations that greatly damaged Montecatini’s penetration and expansion (Saviotti
1990). As Amatori (1990) sums it, Montecatini’s U.S. initiative had the typical features of a
“forward escape”: uncertainty in the productive path, difficulties of financing, inadequate
structure of commercialization. Unfortunately the merger of Montecatini and Edison, which was
supposed to resolve the ‘chemical war’ at home and create an internationally competitive Italian
champion, did not live up to the expectations (Fauri 2000)102. In the same sector, Chatillon, which
had been taken over by Edison in 1955, entered into a strategic alliance with Firestone in 1961,
leading to the inauguration of a plant in Hopewell to produce components for Firestone tires and
later on to a joint venture in France (Polyfibres) (Falchero 1992, p. 231).
Under the visionary directorship of Adriano Olivetti,103 Olivetti was the first Italian firm, indeed
one of the first European ones, to make a big U.S. acquisition. The company was set up by
Camillo Olivetti in 1908, after he had finished a stint of lecturing in electrical engineering at
California’s Leland Stanford University.104 After the war, with German production stopped, the
Ivrea-based company regained its global leadership in the production of calculators and
typewriters, not only for their intrinsic quality but also for their esthetic design. More than half of
production was exported (52% in 1949) and the vast potential of the American market was seen as
Japan’s Sekisui Chemical built a factory to make polystyrene foam in Hazelton, PA., another area of chronic
“Foreign capital moves toward U.S.,” Business Week, 29 July 1961. Montecatini also spent US$5.7 million to buy
4% of Minerals & Chemicals-Phillip, an ores and metals company.
Despite the potential benefits accruing from the technological complementarities between the two entities –
Montecatini had pursued excellence through an indigenous effort, while Edison’s entry into chemicals had stemmed
from cooperation agreements with foreign partners – it was the Edison’s more modest and finance-driven strategy that
prevailed, leading to a radical downsizing of Montecatini’s R&D activities.
Olivetti aimed at giving his workers the best conditions in Italy and a voice in management. He promoted a broadbased cooperative movement, on the strength of which he won a seat in the Chamber of Deputies in 1958.
David Starr Jordan, who was president of the University at the time, developed the doctrine of Unitarianism.
one of the main drivers for sizeable investment.105 In 1952, the Museum of Modern Art in New
York organized a 40-day exhibition of the work of the Olivetti Company (Lionni 1952106) and in
1959 a poll organized by the Illinois Institute of Technology among 100 top designers, architects,
and design department heads of manufacturing firms and universities around the world designated
the Lettera 22 typewriter, designed by Marcello Nizzoli in 1948, as the best-designed product of
modern times. The Fifth Avenue flagship store, designed by the famous Milanese firm of
Belgioioso, Peressutti and Rogers, was inaugurated in 1954, followed by others in San Francisco
and Chicago. Olivetti also became involved in an ambitious project with the University of Pisa in
1954 to design an electronic computer with commercial purposes (De Marco et al. 1999)107 and in
1959 it launched the Elea 9003, Italy’s first electronic computer. In 1956 Adriano Olivetti was
made an honorary member of the American Institute of Planners and deputy chairman of the
International Federation for Housing and Town Planning and one year later his entrepreneurial
achievements won further recognition when the National Management Association of New York
awarded him a prize for “ground-breaking activity in the field of international company
A subsidiary, managed by Dino Olivetti, was established in New York in early 1950, to earn the
necessary foreign exchange to cover dollar purchase of materials and equipment. Facing relatively
little competition, as only Remington Rand was producing them, it began selling printing
calculators, of which nearly 10,000 had been sold there years later.108 As in the case of Necchi,
the Italian company was competing on quality (innovative qualities) rather than price – its
machine was selling at US$555, versus US$469-525 for Remington Rand’s. Olivetti also opened
an electronic computer research laboratory, in New Canaan, NJ, as early as in 1952.
In October 1959, Adriano purchased 34% of Underwood’s stock for US$8.7 million. Once the
leader of the U.S. typewriter industry – it was the company which had inspired his father Camillo
when he formed Olivetti in 1908 and which Adriano himself had unsuccessfully tried to visit in
1925, during his first and fundamental U.S. trip (Crepax 2001 and Gemelli 2001) – Underwood
was bleeding after four years of heavy losses. In 1958 it was employing 11,000 people for sales of
US$71.8 million (US$85.2 in 1957). A merger with Litton Industries had been rumored for month
on Wall Street, but Underwood management seemed to prefer a partnership with Olivetti.109 The
ASBI, Consorzio sovvenzioni su valori industriali, pratt. No. 51, fasc. 1, pp. 222-6 (5 February 1947) and pp. 2834 (15 December 1950).
Born in Amsterdam in 1910, Lionni was raised in Genoa and Milan, where he rubbed shoulders with the futurists
while studying economics. He moved to the United States in 1939, where as an art director of N. W. Ayer & Son in
Philadelphia he supervised Container Corp. of America’s famed series that brought modern art into advertising
layout. After working as design director for Olivetti in 1951-58, Lionni became art director of Fortune. See “Art in
Many Forms,” Time, 22 December 1958.
Surfing on the support received from Enrico Fermi, to whom the University had asked what would be the best
instrument of national importance for uplifting Pisa scientific stature, the first electronic and digital computer for
scientific applications entirely designed and manufactured in Italy was completed in 1955.
“Invading U.S. Office Machine Market,” Business Week, 31 January 1953.
“Invasion in Office Machines,” Business Week, 10 October 1959. According to Ochetto (1985, p. 286), the
conversations were being held with Monroe, a subsidiary of Germany’s Olympia. At the time, about 50% of Olivetti’s
annual gross sales, upwards of US$110 million, was coming from exports from Italy and a further 20% from overseas
production in Scotland and Argentina.
Italians, for their part, were worried about other European companies taking over Underwood and
concerned that resentment over “the growing flood of foreign imports of all kinds” could lead to
higher tariff barriers. The negotiations were conducted in a hurry – in fact no proper due diligence
was conducted – and probably concluded against the advice of Lazard Fréres (Ochetto 1985, p.
In February 1960, Adriano died of a heart attack, aboard a train in Aigle, Switzerland. He left
behind an unresolved governance structure and an equally unclear social mission, but also a brand
name with a value probably unparalleled among Italian, if not European, firms. Directors passed
over Olivetti’s son Roberto and several other Olivetti family members to elect Giuseppe Pero,
then 66, President and CEO. Pero, who had been Olivetti director general since 1938, let
Adriano’s political adventures die, devoting all his efforts strictly to business. In April 1960
Olivetti increased its stake to 69%, trading more than US$30 million worth of Underwood
common stock in exchange for Olivetti Corp. of America (1959 sales: US$15 million). When
Underwood’s President Frank Beane made the deal, he expected to keep running the company.
But after incurring an estimated US$2.5 million loss in the first quarter of 1960, Pero sent a crack
team headed by Ugo Galassi, head of Olivetti U.S. sales subsidiary. Underwood sold less that year
than in 1959 (US$76 million), but the rewards of succeeding were great – Underwood had a taxloss carry-forward of at least US$25 million that could be applied against earnings – and Galassi
expected to reach the break-even point in the first quarter of 1961.110
In the case of Pirelli, foreign investment in the 1950s and 1960s went largely towards
strengthening its production and sale position in regions where it was already present.111 112 The
first direct investment in North America was a new cable factory in St Johns, Quebec in 1953 and
by the end of the 1960s Pirelli Canada controlled four cable plants. In the face of the dominance
of Goodyear and Firestone, as late as in 1966 Pirelli was still adamant about its reluctance to sell
tires in the United States.113
IRI firms very timidly started investing abroad, and in the United States in particular. Already in
1945 an attempt had been made to create a joint venture with Fiat, to be extended to Montecatini
and others, to promote exports114. After this project failed, IRI decided to organize its autonomous
foreign relations and instituted an Ufficio rapporti con l’estero (which later became Servizio
Relazioni Internazionali). BCI and Credito Italiano timidly returned to New York with
“Olivetti Moves In,” Time, Monday, 25 April 1960 and “Olivetti Hopes to Rejuvenate Underwood, Typewriter
Pioneer,” The New York Times, 21 June 1960.
Among these were Argentina, Brazil, Spain, Britain, and Belgium.
By the end of the 1960s, cable production represented 40% of total group production and tyres 45% cent; but
within the foreign group cable production was still the dominant activity with 60% of total production, compared with
30% for tyres. See Montenegro (1993).
“How to Insulate,” Time, 8 April 1966.
The “Ufficio Sviluppo Esportazioni” was liquidated at the end of 1947. See “Appunto sulle motivazioni che hanno
portato alla creazione dell’Ufficio Sviluppo Esportazioni” in ASIRI, s2.12-f5.2-p. 7 (19 December 1946); see also
“Liquidazione USE Ufficio Sviluppo Esportazioni – Roma” in ASIRI, s2.12-f5 busta 053 (2 May 1950).
representative offices,115 whereas Banco di Napoli (that was owned by the Treasury) was the first
Italian bank to open a fully-licensed branch after the war (in 1949). The IRI manufacturing subholdings created their own trading arms which were sometimes also present in the United States –
for example Siderexport in the case of Finsider116. Moreover, insofar as they tended to operate in
capital- and knowledge-intensive sectors, IRI companies had numerous contracts for licenses and
technical assistance. Finmeccanica set up shop in New York in 1954 to scout for licensing deals
and to push Italian products there.117
Italian Business in America in 1962-1992
The formation of the first centro-sinistra government in 1962 marked a watershed in Italian
economic and business history. As the Left regained political assertiveness, and industrial
relations became increasingly tense, Italian capitalists froze domestic investments, engaged in
capital flight, and also started considering FDI as an insurance policy against the perceived risks
of the political scene at home (Barbiellini Amidei and Impenna 1999). At the same time, Italian
firms took part in the general process of corporate internationalization that increasingly
characterized the Western world (and not the United States only118). In fact, ten years later the
degree of internationalization of Italian big business, measured by foreign sales over total
turnover, was on a par with that of competitors, if not higher. In the case of Fiat, for instance, the
coefficient was higher than for the Detroit’s Big Three (Cacace 1977)119. Nonetheless, Italian big
business was still made of very few companies and the country remained a marginal investor, its
share of the total stock being of some consequence in Africa only (4% in the early 1970 according
to UN 1973, p. 19).
For Fiat the 1960s was a decade of retrenchment from the United States (Tesi 2005). In 1965-70,
Franklin Roosevelt junior, one of President Franklin and Eleanor’s sons, had the North Eastern
franchise. In the early 1970s, Fiat Roosevelt embarked in an ambitious expansion drive, aiming at
60,000 annual sales, but before too long Fiat car operations in the United States were reduced to a
small network of dealerships. A quasi-definitive hit was the findings by the National Highway
Traffic Safety Administration that Fiat cars were subject to chronic rusting problems. When Fiat
BCI managing director saw greater potential in the New Yok office than in the one opened in London. See
“Interrogatorio del dott. Antonio Rossi”, in Commissione economico della Costituente, Industria, Appendice alla
relazione. Interrogatori, Vol. 2, pp. 285, 23 March 1946.
Siderexport was in charge of foreign commercialization of steel products of the Finsider Group firms. Established
in 1936 as Coloniale siderurgica (Colsid) società anonima, operated as “Siderurgica Export” after the second WW
becoming Siderexport in 1959 (see “Verbali comitato interaziendale. Commerciale” in ASIRI, s3-f100.2f6, 28
September 1946; see also “Siderexport” in ASIRI, Numerazione Rossa, faldone 206.6, 11 July 1960). Since 1992 it
has been active as Ilva international.
“Business Abroad Briefs,” Business Week, 31 July 1954. Finmeccanica si avvale di Intercommerce (VVV non
c’era negli USA).
Although the activities of US multinational corporations represented half of the total stock of foreign direct
investment in developing countries (UN 1973, p. 19).
In 1969 already, Fiat’s foreign assets were 43% of the total (Cespe 1971, p. 47). Over half of passenger automobile
production in the USSR in 1975 was expected to come from Fiat (UN 1973, p. 22).
pulled out in January 1983, a most unconventional auto maker, Malcolm Bricklin, began
importing the Fiat Spider 2000 as the Pininfarina and the X-1/9 as the Bertone.120
Other Fiat companies, on the other hand, started building more consequential businesses in the
United States. Fiat-Allis, 65% owned by Fiat with the rest in the hands of Allis-Chalmers, aimed
at combining the Italians’ prowess in small construction equipment with Allis heavyweight earthmoving vehicles. Despite initial problems with the variation between American and Italian
accounting practice and the need to refit Fiat machines to meet US specifications, the joint venture
proved very successful almost from the very beginning.121 Another joint venture, this time with
West Germany’s Klöckner-Humboldt-Deutz, was Iveco, for Industrial Vehicles Corporation. Its
medium-sized, diesel-powered Magirus trucks were first introduced into the most competitive
segment of the US truck market in 1978. Iveco limited the number of models offered to US
consumers, in the hope to sidestep the problems encountered by Fiat, which almost two decades
earlier had launched five different models and almost instantaneously run into parts inventory
bottlenecks.122 In 1977, Fiat Agri, the group agricultural machinery subsidiary, acquired 100% of
Hesston (1,834 employees and LIT328 billion turnover in 1983), thus becoming the world’s
second-largest tractor producer (with a share of about 12% of world market) (Onida and Viesti
1988). In 1973, an Agnelli-affiliated company acquired about 6% of the common stock of the I-TE Imperial Corporation, a major manufacturer of electrical distribution, transmission and control
In a way, this period was particularly successful on a personal level for the Agnellis. Giovanni,
who had succeeded Valletta in 1966, widened his own circle of international business contacts,
becoming a member of Chase Manhattan Bank’s international committee, XX of the Metropolitan
Museum of Art123 and a founding member of the Trilateral Commission. In 1964, Ifi, the family
holding that at the time owned some 22% of Fiat, also became an important shareholder of 3M
(Minnesota Mining & Manufacturing), in exchange for Ifi’s stake in Ferrania – Italy’s largest film
manufacturer with world-class skills in photosensitive materials for applications in industries such
as photography, health care and graphic arts.124 The stake was sold a few years later as Ifi was not
used to hold purely portfolio placements.125 Something similar can be said of Giovanni Buitoni,
Malcolm Bricklin had previously worked for Innocenti, the Italian producer of Lambretta motors scooters, formed
Subaru of America in 1968, and manufactured a low, sleek sportster with gull-wing doors in St. John, Canada. Before
his dream of building a car with his own name on it ended in a flurry of legal actions in late 1975, some 2,875 of the
sleek safety/sports cars were built. In the late 1970s, Bricklin started a company to import the Yugo, a warmed-over
Fiat model built by Zastava in Yugoslavia, at US$3,995.
“Multinationals: Fiat-Allis team invades the U.S.”, Business Week, 20 July 1974.
“A new challenger in trucks”, Business Week, 3 July 1978.
On 16 March 1988, Fiat Chief Is Honored At the Met In 1984-2003, Agnelli was also a member of the jury of the
Pritzker Architecture Prize, the only non-American, non-architect in the period alongside Lord Rothschild (Chairman,
Board of Trustees, National Gallery of Great Britain) who has served in 1987-2004. Another Italian firm, Ratti, has
been associated with the Metropolitan Museum of Art to create a laboratory-style structure for the storage, restoration
and conservation of all the Museum textile collections in the Antonio Ratti Textile Center.
In 1964, 3M also bought another photo-processing company in the United States (Dynacolor).
“In Italy, Agnelli is the man to see”, Business Week, 13 May 1967.
who had gone back to Italy in 1956 to set up a frozen-food industry, using Italy’s ice-cream
dealers as outlets. This did not prevent Giovanni Buitoni from hiring Manhattan’s Carnegie Hall
in 1961 to fete his 70th birthday and “to make a rafter-rattling concert debut”.126
Ferrero waited until 1969 before opening a sales office in New York. Fearing the competition of
peanut butter, it did not introduce its globally best-known product, Nutella, and chose instead to
promote the breath mint Tic Tac. Thanks to a successful marketing campaign built around the tag
line “Put a Tic Tac in your mouth and get a BANG out of life,” Ferrero invested in a dedicated
production facility in New Jersey.
The story of Olivetti proved more complex. From the U.S. headquarters at One Park Avenue, the
former PepsiCo building, Galassi modernized the Hartford plant, halted production of
bookkeeping machines and portable typewriters, and stopped bidding for low-profit defense
contracts. He also streamlined production items from 15 to four, cut manufacturing costs by a
third, and recruited and trained 1,500 new salesmen. Under new President Guido Lorenzotti, at 34
one of the youngest corporate heads in the United States, Underwood claimed “to be the industry
kingpin in both adding machines and calculators, and No. 2 behind IBM in sales of full-featured
office electric typewriters”.127 By April 1964, the company was holding 90% of the stock of
Underwood, now renamed Olivetti Underwood. Unfortunately, U.S. sales had hardly nursed back
to US$117 million in 1963 — and to profit for the first time under the new ownership (although
Galassi had to see a return to profits by 1962) — when other problems appeared.128 Import
restriction in Argentina, traditionally one of Olivetti’s main markets, almost completely cut off an
attempt to ship in other machines while in Brazil hyperinflation ate up profits. The tab on the
consolidation and revamping of Underwood had come close to US$100 million and contributed to
the almost five-fold increase in bank debts from US$7.6 million to US$32.5 million between 1958
and end-1963. In Ivrea, the co-directorship of Roberto and Camillo Olivetti proved highly
ineffective to cope with the new difficulties and decide on the need to seek external support.
Eventually, a syndicate headed by Agnelli’s Ifi and also comprising Pirelli, La Centrale and
government banks put US$50 million into Olivetti stock, installed Aurelio Peccei, a rising Fiat
executive, as managing director, and picked IRI vice president Bruno Visentini as the first man
outside the Olivetti family ever to head it. In 1964, Underwood subsidiaries in the United
Kingdom, France, Germany, and Mexico were merged with the Olivetti equivalents in the same
countries. A 60% stake in the computer division was sold to GE in September 1964, barely a
month after the American company had clinched a similar deal with France state-owned Machines
Peccei streamlined Olivetti’s operations and cut losses. In 1965 Gianluigi Gabetti succeeded
Lorenzotti, who returned to Italy to direct Olivetti’s commercial operations. Peccei also stationed
three managers in the United States to study methods of executive recruitment, development,
evaluation and other human resources techniques and hired Stanford Research Institute to study
“Belting out arias from Rigoletto and Ernani, the Italian-born industrialist brought the momentous evening to a
wildly bravoed climax by joining Metropolitan Opera Star Licia Albanese in a duet from Don Giovanni and
smothering her with kisses as a reward for carrying him.” See Time, 8 December 1961.
“Switching to a black ribbon”, Business Week, 24 October 1964.
This represented a third of Olivetti global 1963 sales of US$360 million (see “The Destiny of Dynasties”, Time, 17
April 1964).
market prospects for Olivetti more sophisticated machine tools.129 Olivetti Underwood acquired
Federal, a copying machine producer, from Victoreen Instrument, purchased design prototypes
from Quik-Chek Electronics & Photo Corp., and established a new R&D group. All these
operations were merged in 1965 under a new subsidiary, Copia, to market copying machines
through Olivetti Underwood distribution network. With 52,892 employees, Italian profits rose
from US$7 million in 1965 to nearly US$11 million in 1966, when worldwide sales reached
US$508 million, up US$62 million over 1965. Global profits grew about 40% to US$16
million.130 Olivetti also pushed with renewed determination into office automation, debuting a
new desk-top computer, Programma 101. The 1965 launch in New York was the first time that a
new company product was unveiled abroad and not in Italy. In 1967 Peccei was named to the
honorary post of vice chairman,131 while Roberto Olivetti and Bruno Jarach, an engineer arisen
through the company ranks, were appointed joint managing directors. The crumbling Harford
plant was closed in 1968 and one year later a new plant was inaugurated in Harrisburg designed
by Louis I. Kahn, one of the most uniquely designed modern buildings located in Central
Pennsylvania.132 In 1969, the United States accounted for 25.5% of Olivetti’s total sales, making
this the company’s largest market overall, although almost ½ of employees were still in Italy
(Cespe 1971, Tab. 1, p. 51). At the same time, as other Italian multinationals including Fiat and
Eni, Olivetti started negotiations to construct a factory in the USSR.
The vision of Olivetti as more than a simple office machine producer led to the decision of
investing in California.133 In 1972, the Advanced Technology Center was set up in Cupertino and
Olivetti Research Center in Menlo Park. ISC-Bunker Ramo, Shelton, CT (USA) an Olivetti
company Over the following ten years, there were 170 researchers, half of them Italian. During
those ten years, at least 300 Italian engineers passed through that lab. Form 1971 to 1973, the
percentage of electronics-based calculating and accounting machines in Olivetti global turnover
rose from 23.9 to 37.8 and in 1974 two new minicomputers and a computer terminal were
launched.134 Appointed in 1978, CEO Carlo De Benedetti closed half of the 90 offices of Olivetti
in the United States (which had lost US$30 million on US$160 million of sales in 1978) and sold
its New York headquarters as well as the adjacent Nassau Hotel.135 On the other hand, he viewed
the American R&D facilities as a strategic asset for Olivetti to rub elbows with others in the U.S.
electronics community and become a major factor in the “office of the future”. In 1980, the first
Olivetti computer took form in Cupertino. The M20 – one of the very rare computers based on the
Zilog Z8000, a 16-bits microprocessor very close to its 8-bits big brother, the Z80 – was launched
in March 1982. When Time devoted its 1983 New Year’s cover story to the upcoming ICT
“Olivetti hits the keys of revival,” Business Week, 20 November 1965.
“The Renaissance,” Time, 24 February 1967
Peccei became president of ItalConsult.
“Olivetti building’s facelift sign of cultural destruction,” The Patriot News, 30 August 1997.
This does not mean that Olivetti traditional products were shelved – in his article on leaving Saigon, Time
correspondent Roy Rowan wrote of “sa[ying] goodbye to my faithful Olivetti” (“’This Is It! Everybody Out!’”, 12
May 1975).
“Olivetti’s second try at the computer market”, Business Week, 26 October 1974.
“When a building goes piggyback”, Business Week, 27 November 1978 and “Olivetti: its growth in Europe will
rely on U.S. technology”, ibid., 12 February 1979.
revolution, the M20 was one of the featured items.136 More than 50,000 units were shipped in the
first year. Digital Research used the Olivetti M20 personal computer to develop a Z8000-based
version of CP/M.137
Thanks to substantial investment in R&D, Pirelli’s cable business remained highly profitable. As
it developed stronger ownership advantages, especially in high-tension cables for the power
industry, Pirelli shifted the focus of its international presence from South America, and the
developing world in general, to Europe and the United States. A US$4.5 million contract was
signed in 1968 with Long Island Lighting to provide a 12-mile cable linking Long Island and
Connecticut. The Pirelli technology was seen as superior because it allowed to lay very long
cables with very few splices.138 Pirelli Enterprise was founded at the end of the 1970s and five
U.S. plants were acquired. In the 1980s, as part of a push into opto-electronics, Pirelli acquired
David System (producers of technologically-advanced communications systems) in Silicon
The tire business, on the other hand, failed to reach global dimensions despite two decades of
remarkable growth and the Pirelli family decided to enter into a long-term research and
development agreement with British Dunlop group.140 Interestingly, gaining access to the U.S.
market was one of the strategic objectives of this partnership: according to Leopoldo Pirelli, “il
primo figlio che nascerà dal matrimonio con la Dunlop sarà un figlio Americano” [the first son of
the marriage with Dunlop will be American]141. Despite successes in the development of lowprofile tires and in revolutionary fibre optics, the joint venture did not mature into a full merger
and both parties agreed to terminate it in 1981 (Amatori and Lavista 2007).142 In the 1980s,
Pirelli’s international expansion strategy gained momentum, leading to the 1988 acquisition of
Armstrong, the sixth-largest U.S. tire manufacturer, for US$197 million.143 Pirelli then tried to
take control of Firestone, the nation’s third-largest tire maker, making a US$1.86 billion bid in
“The Computer Moves In”, 3 January 1983.
Like most of the computers designed before the IBM PC era, the M20 offered technical choices which made it
totally incompatible with the rest of the micro world.
“Pirelli see new light in the East”, Business Week, 13 July 1968. In the early 1970s, the LILCO job helped Pirelli
win a US$13 million contract from the British Columbia Hydro & Power Authority for a 22-mile crossing between
Vancouver and the mainland, which it accomplished without any splices.
These and other acquisitions made Pirelli the world leader in cable production; the share of cable production in
total Pirelli production reached 71% in 1980; Pirelli increasingly focused on telecommunications (fiber optic) cables.
In 1970, American Viscose signed a licensing agreement with Pirelli for its advanced technology in the use of steel
wire in radials (Battle of the Belts, Time, 26 April 1971).
Espansione, May 1970, cited in Cespe (1970). Dunlop had three plants in the United States. Pirelli-Dunlop Union
became the world’s third-largest manufacturer.
When the world tyre market entered in recession as a result of the oil crisis (increase in raw material costs,
decrease in car production, market saturation), Pirelli and Dunlop were slow to respond to the need for cost-saving
technologies. The terms of their alliance were extremely complex and worked to prevent serious integration. By the
end of the 1970s both were in great difficulties. This situation weakened the reciprocal trust between the partners
leading to the dissolution of the Union in 1981. The share of tyres production in total Pirelli production dropped to 23
per cent.
In 1985 Pirelli bought Metzeler in Germany. In the 1980s large investments were made to restructure and recover
the tyre sector, diversify production and improve quality, leading to significant gains on the international market.
March 1988. The offer was contingent on Firestone dropping its plans to enter into a joint venture
with Bridgestone of Japan, which had previously agreed to buy a 75% interest in Firestone’s tiremaking business. This led to an acrimonious battle as a Federal judge rejected a claim by Pirelli to
ban as unconstitutional the Ohio Control Share Acquisition Act that requires a raider to wait up to
50 days for shareholders to vote before buying tendered shares.144 Nonetheless, at the end of the
1980s Pirelli Group was still the most important Italian MNE (Onida and Viesti 1988).
This period saw the rise of Italy’s huge state-owned sector and in particular of IRI, the industrial
holding company (on which see inter alii Barca and Trento 1997 and Toninelli 2000). Because
SOEs tended to operate in capital-intensive sectors and had a higher degree of technological
expertise, at least some of them could have accumulated the necessary ownership advantages to
internationalize. Nonetheless, insofar as social goals were imposed on management, in particular
that of contributing to regional development, Italian SOEs invested mostly in the Mezzogiorno,
especially from the 1960s onwards. The low degree of internationalization also resulted from the
fear of crowding out domestic investments by engaging in FDI and from the latter’s very low
vote-winning potential.
From the mid-1960s onwards, a more proactive strategy of internationalization started to emerge
and IRI organized an important conference about its “componente estera”145. Internationalization
was seen as an emerging priority both to lower the dependency on the Italian market, where
demand growth was softening, and to reinforce the capacity of the firms, and the Italian economy
more generally, to compete on the basis of quality and innovation.146 Indeed, one year earlier IRI
had organized a similar conference to discuss the group’s scientific and technological research
activities and its place in the incipient Italian system of innovation (Pastorelli 2006). Foreign
markets were to become a stable and fundamental component of the group’s business, and not
simply an outlet for occasional domestic downturns. IRI’s FDI in 1965 amounted to LIT13.1
billion (equal to current €118.5 million), of which 62% was to source raw materials (for Finsider
firms these FDI were very important; a total of LIT8 billion). Roughly a quarter (LIT3.4 billion,
26%) was in commercial companies to promote exports of goods made in Italy and an additional
12% (LIT1.5 billion) was invested in productive and commercial activities abroad, including joint
ventures with foreign partners147.
Bridgestone eventually gained control over the American company in a negotiated US$2.6 billion acquisition. The
global tyre industry was badly hit by the recession of the late 1980s and early 1990s. Pirelli’ s reaction was to engage
in major merger and acquisition exercise: after the failed American attempt, in 1990 Pirelli involved in a near disaster
unsuccessful takeover bid for the German company Continental.
See ASIRI, SD 1583, Servizio R.I., 6. Temi SRI, 6.2.4 – Convegno sulla componente estera del Gruppo IRI.
Speech by Prof. Giuseppe Petrilli, presidente dell’IRI, 18 November 1965, in ASIRI, SD 1583, Servizio R.I., 6.
Temi SRI, 6.2.4 – Convegno sulla componente estera del Gruppo IRI. See also “La dipendenza tecnica del gruppo IRI
dall’estero” in ASIRI, SD 1585, Servizio R.I., 6. Temi SRI, 6.2.4/4 – Convegno sulla componente estera del Gruppo
IRI – Gruppo di lavoro “Coordinamento Attività Commerciale”.
See “Partecipazioni del Gruppo IRI all’estero, IRI, Servizio Rapporti Internazionali, maggio 1965” and “La
organizzazione commerciale delle aziende manifatturiere del Gruppo IRI, IRI, Servizio Rapporti Internazionali, aprile
1965” in ASIRI, SD 1585, Servizio R.I., 6. Temi SRI, 6.2.4/4 – Convegno sulla componente estera del Gruppo IRI –
Gruppo di lavoro “Coordinamento Attività Commerciale”.
Still, the emphasis was firmly on Western Europe and, to a lesser degree, the Communist
countries and the developing world. In the early 1960s, 4% of IRI total exports was going to the
US market – 8% for Finmeccanica (mainly Alfa Romeo cars) and 3% for Finsider (mainly
Dalmine and Italsider) – for a grand total of around LIT6 billion in 1963148. In the United States,
the most important presence was constituted by the joint Finmeccanica-Fincantieri Delegazione in
New York (similar entities operated in Argentina, Brazil, Spain and the Soviet Union), while
individual IRI companies had simple agencies and trading representative.149 The most important
was Alfa Romeo Inc. of Newark, NJ with a US$95,000 capital (4% of Finmeccanica total FDI).150
Finsider Group-Siderexport had a token presence, Dalminter Inc.151, and the public broadcasting
company RAI had a US5,000$ American subsidiary in New York (RAI Corporation Italian Radio
TV System).152 Finsider also took minority positions in Wabush Iron and Wabush Pellet of
Cleveland, OH. These companies were active in iron mining and beneficiation, exploiting assets
in Canada, and the Italians contracted the management to Pickland Mathers & Co.153 Ansaldo
Trasporti and Breda Costruzioni Ferroviarie started selling in North Americ in 1978.154
AnsaldoBreda, Inc. is the largest modern day supplier of transit rail cars in the United States
outside of the New York metropolitan area.
An interesting proposal that was made at the IRI 1965 “Componente estera” conference was to
follow the Japanese example of the trading companies as a more effective tool to promote IRI
See “Destinazioni geografiche delle esportazioni delle aziende manifatturiere del Gruppo IRI nel triennio 19611963, IRI, Servizio Rapporti Internazionali, marzo 1965” in ASIRI, SD 1585, Servizio R.I., 6. Temi SRI, 6.2.4/4 –
Convegno sulla componente estera del Gruppo IRI – Gruppo di lavoro “Coordinamento Attività Commerciale”.
Speech by Giorgio Tupini, presidente di Fincantieri, 18 November 1965, in ASIRI, SD 1583, Servizio R.I., 6.
Temi SRI, 6.2.4 – Convegno sulla componente estera del Gruppo IRI. Finsider mining companies were also active in
Canada, as were some commercial companies (Dalmine Scaffolding Ltd.; Dalminter Canada). See “Partecipazioni del
Gruppo IRI all’estero”, IRI, Servizio Rapporti Internazionali, maggio 1965” and “La organizzazione commerciale
delle aziende manifatturiere del Gruppo IRI, IRI, Servizio Rapporti Internazionali, aprile 1965” in ASIRI, SD 1585,
Servizio R.I., 6. Temi SRI, 6.2.4/4 – Convegno sulla componente estera del Gruppo IRI – Gruppo di lavoro
“Coordinamento Attività Commerciale”. In 1958, Alitalia, the Italian airline, took a lease on the major part of the
thirty-second floor and on a large street floor area in the new Tishman Building at 666 Fifth Avenue. It moved/added
to the American Management Association Building at 135 West 50th Street, between the Avenue of the Americas and
Seventh Avenue, in 1965.
In 1975 Alfa Romeo was spending close to US$3-million for advertising in the United States (“J.P. Itta Agency
Gets Alfa Romeo Account,” The New York Times, 5 June 1975).
Dalminter was incorporated in 1955 in New York, with a minimal US$10,000 capital (LIT3.1 million, equal to
0.03% of Finsider total FDI), in charge of sales and marketing; this company was sold in 1969. See
ASIRI.AG.20001.30055 (b. 1, 1955-1964). In 1970, a new sales subsidiary, SIDERIUS (incorporated in New York
with a US$2,000 capital) replaced Dalminter. See Annuario 1970 del gruppo IRI, Edindustria Editoriale, Roma 1970.
See Annuario 1970 del gruppo IRI, Edindustria Editoriale, Roma 1970.
The companies’ capital was US$11,500 and US$1,100,000, respectively. See ASIRI.AG.20001.30077 (bb. 2
1959-1978), Annuario 1966 del gruppo IRI, Edindustria Editoriale, Roma 1966, and Annuario 1970 del gruppo IRI,
Edindustria Editoriale, Roma 1970.
Breda won a number of big-ticket tenders, including for the rolling stock of the Washington Metro (series 20002075, 3000-3289, and 4000-4099, delivered in 1982-91), for the Atlanta and Los Angeles subways (142 trains), and
the Boston and San Francisco light metro systems (251 vehicles). In 2001 the merger of two companies gave birth to
AnsaldoBreda, a Finmeccanica company.
commercial presence on the American market.155 In fact, the Italian Commercial Office in
Washington had drawn IRI management’s attention to the success of the Japanese with
cooperative organizational structures of exporting and importing firms and it was decided to
explore the possibility of strengthening and enlarging the existing Delegazioni FinmeccanicaFincantieri and Siderexport branches. Nonetheless, major firms of the group as well as the
subholdings resisted the proposal, fearing a loss in their autonomy.
The Eni story is different. Although Enrico Mattei wished to create a national oil company able to
hold its own against the Seven sisters on third markets, he also sought American support, sending
managers and engineers there since 1952 and deciding in 1955 to create a representative office in
New York with support from Banca Nazionale del Lavoro (Pozzi 2007).156 The office proved to
be a very useful investment to build goodwill and tap into the vibrant corporate culture of the
United States – in fact Eni was to become the first European customer of Booz Allen & Hamilton,
the management consulting firm. Agip Usa was founded in 1962, in Wilmington, Delaware, to
facilitate the commercialization of equipment and materials of interest to the Group companies,
but also to smooth the relationship between Mattei and the US administration. This followed from
an express request made by the Italian Ministry of Foreign Affairs to calm the tensions that
accompanied Agip’s aggressive pursue of exploration and production licenses in the Middle East
and the signing of an important deal with the Soviet Union in 1960 (Buccianti 2005).157 Maugeri
(1994) documents the ongoing attempts on the part of the manager to obtain political recognition
from the USA, in exchange for desisting from his activities as a spoiler – in fact a U.S. visit was
under preparation when Mattei died in a plane crash in 1962.
In 1966, a new company, Agip Petroleum Co. Inc., was assigned to manage hydrocarbon
exploration and production. In the beginning, the company’s strategy called for the organization
of a series of co-titles - an earlier example of a joint venture - in partnership with the leading
American companies, without however, the responsibilities of direct operatorship. The company
subsequently acquired modest stakes in offshore exploration operations on the Continental Shelf
and in Alaska. Beginning in 1979 Agip Petroleum signed outsourcing agreements with Texaco,
Conoco, Mobil and a number of smaller companies for the acquisition of major interests in fullyfledged operations. These were primarily in the offshore areas of Texas (Dry Hollow and Conger
Field), California (Sacramento Valley and Salinas Valley) and Alaska (Kenai Peninsula), as well
as the international offshore waters of the Gulf of Mexico.
Speeches by Romolo Arena (IRI general director) and Manrico De Rosa (Ansaldo general director), 18 November
1965 in ASIRI, SD 1583, Servizio R.I., 6. Temi SRI, 6.2.4 – Convegno sulla componente estera del Gruppo IRI.
Eni’s group chemical arm Anic, Stanic, and Standard Oil jointly owned refineries in Livorno and Bari. In the
1960s, Eni signed major contracts with Standard and Gulf for the purchase of crude oil and the sale of refined
products. At the end of the five-year contracts, the contracts were allowed to expire, while domestic refining capacity
increased substantially, especially that of Eni.
AGIP partnered with the International Egyptian Oil Company in 1955 and the National Iranian oil Company in
1957, then also entered Morocco (1958), Libya and Sudan (1959), Tunisia (1961), and Nigeria (1962) (Pozzi 2003,
pp. 24-25). According to Business Week, “The new Italy-Iran deal – ballyhooed by the Italians as 75% to the
producing country and 25% to the foreign company – fans nationalist desire in many oil lands to hang over a bigger
share of profits” (“Iran Oil Deal Stirs Policy Debate All Over Globe”, 28 September 1957). The New York Times
carried a front-page story on Mattei on 6 January 1958 (see “U. S. Oil Concerns Assailed by Italian”). See also Bairati
(1983, pp. 305-8) on Valletta’s conversations in the United States regarding Mattei and Eni’s strategy in the Middle
An office was opened in Houston but production soon began to decline, leading in 1983 to a
drastic change in strategy. Agip Petroleum Co. gradually abandoned areas considered to be fully
exploited, concentrating its exploration activities on defined new frontier areas - which presented
higher risk, but also higher potential - and in highly selected older areas. The focus in resource
investments shifted from onshore to offshore exploration in Texas. Eni participated in more than
50 joint ventures, including the purchase of approximately 60 exploration permits. In 1986 the
sharp drop in the price of oil lead to a reduction in the operations of the American oil industry, at
which point Agip Petroleum cut its investment budget by 50%. Later, attracted by the potential of
deep offshore drilling, Agip decided to take on the majors through a series of direct acquisitions,
mergers and alliances. In 1991 Eni bought Freeport McMoRan, whose portfolio included five
permits in the Gulf of Mexico, three of them as main operator. Meanwhile, Agip Petroleum
Exploration Co. was founded for exploration activities, while development operations remained
the responsibility of Agip Petroleum Co.
The complexity of the technology for in deep-water exploration lead to a progressive increase in
capital investment. Considered a sector of strategic importance, Agip Petroleum Exploration
continued to purchase exploratory blocks in the Gulf of Mexico, at depths of between 1,000 and
3,000 meters, where operations continue. Between 1957 and 1975, in parallel with these upstream
activities, Saipem participated in a number of engineering and construction projects in the USA,
working on innovative offshore drilling technology. Results included the development of the
Scarabeo jack-up, which went on to carry out drilling operations in Europe and the Middle East;
in addition, three semi-submergible drilling units were installed, and the Castoro Sei vessel is
constructed for the laying of pipelines, while additional technology for the recovery of manganese
nodules was developed on behalf of the Ocean Mining Association. The know-how acquired by
Saipem in the course of these developments has been put to good use in all its subsequent
operations throughout the world. On a smaller scale, the activities of Snamprogetti in the USA
lead to involvement in a number of projects, in particular, the supply of basic engineering services
for the MTBE plant.
The petrochemical industry grew fast in the 1960s, almost exclusively in Southern Italy as a result
of a strategy of state-led development158 159. Political interferences clouded the horizon of the
Montecatini-Edison merger (the chemical group was rechristened Montedison in 1970 and created
Montefibre in 1971 by merging Chatillon with other group’s affiliates) and internationalization
ranked pretty low among managerial priorities. While output grew faster in 1951-1969 in Italy
than in the rest of Europe, at 31% in 1968 the export share in production was lower in Italy than in
Switzerland (90%), Germany (48%), and France (32%), although higher than in the United
Kingdom (21%). Moreover, foreign branches contributed a paltry 8.7% of the Italian chemical
industry’s production, much lower than for Swiss (70%), French (33.5%), British (26%),
Law 634 of 26 July 1957 obliged State-owned enterprises to place at least 40% of new investment in Southern
Italy, although this target was seldom reached (Coltorti 1990; Ricciardi 2006). The public share in total chemical
investment soared from around 20% in the 1950-60s to 40% in the early 1970s (Lanzavecchia et al. 1996).
For half a century IRI maintained a relevant stake in Montecatini – in 1946 it held 8% directly and an additional
10% through IRI banks.
American (16%), and German competitors (13%)160. Montecatini-Edison was the world’s tenthlargest chemical group by turnover and was present in 20 countries, but its foreign branches
accounted for only 7% of total turnover.161 Sales in the US, in particular, were equal to only 1% of
Montedison crisis deteriorated in the 1970s and was accompanied by a further retrench from
foreign markets. The situation changed rather abruptly in the early 1980s as the company emerged
from a long and painful process of restructuring (Mutinelli 1995 and Onida and Viesti 1987). In
1983 Montedison set up a joint venture with Hercules: Himont ranked first in Europe and in the
United States in the polypropylene sector and was by far the main Montedison foreign affiliate,
with 1,000 employees and over LIT700 billion in turnover.163 Himont was a good example of a
new internationalization strategy based on strategic alliances with foreign firms. The crucial
investments in new technological competences, in association with the collaboration with foreign
enterprises, finally opened important possibilities for internationalization.
Montedison tried to follow a similar strategy for its pharmaceutical and fine chemical divisions.164
Erbamont, a holding company incorporated in the Dutch Antilles that controlled Farmitalia-Carlo
Erba, was quoted on the NYSE in June 1983.165 The internationalisation process was build on
cross-licensing and co-marketing agreements with main international competitors and on
investments aimed at controlling research centres, mainly in the United States. (Onida and Viesti
1987). In 1985 Ausimont, the Montedison subsidiary making specialty plastics, such as wire
coatings, for the construction industry, merged with Compo Industries to create a new
In 1968 Italy’s eight largest chimica compagnie had total sales of LIT2,211 billion, compared with LIT3,327
billion for Germany’s top 3 and LIT3,207 for the United Kingdom’s top 4 (R&S – Mediobanca 1970).
Other Italian compagnie included SNIA Viscosa (56th) and ANIC (65th).
In 1968, Chatillon (the mother company of the Montecatini-Edison chemical fiber enterprises; like Farmitalia in
the pharmaceutical sector), exported 45.3% of production 1968, its European subsidiaries accounted for 6.6% of total
sales and the North American ones for a further 1.2%. Other Italian chemical firms had slightly higher
internationalization coefficients – although still much lower than foreign competitors’. SNIA Viscosa (which was by
then also under the Montedison spere of influence) exported 34% of Italian production, its foreign subsidiaries
accounted for 16.5% of total sales and the United States accounted for 0.7% of sales (0.9% for the whole of North
America). The figures for ENI’s ANIC were similar. See R&S – Mediobanca (1970). Nei primi anni Settanta
risultavano avere una società controllata commerciale negli USA la Snia e Farmitalia del gruppo Montedison, la
Sclavo-ANIC dell’ENI (farmaceutici), la Rumianca del gruppo Sir e la Mazzucchelli (IFI); la Pierrel del gruppo
Liquigas, attiva nel settore farmaceutico, risultava avere negli USA un investimento diretto produttivo, il gruppo
Liquigas per sua parte aveva 2 controllate impegnate in attività produttive, una in attività commerciale e una
finanziaria. Infine è interessante segnalare la presenza di un investimento diretto produttivo negli USA della Oronzio
De Nora (produzione di impianti chimici). (Cacace, 1975)
In September 1987 Montedison acquired the majority share (a week later the 1987 NYSE crash favoured a 50%
market value decrease).
In the mid-1970s, Farmitalia-Carlo Erba had a commercial presence in the United States (Cacace 1975). After
WWII, Italian pharmaceutical firms, which had never played a significant international role, also saw their share of
the domestic market decline. Italy (and Japan) did not protect pharmaceutical products, limiting patents to process
technologies until 1978: as a result, firms did not invest in R&D in Italy, concentrating on process innovation to
produce existing molecules (see Henderson et al. 1998).
Hercules exchanged its ownership interest in Andrea Laboratories, a US-based drug company, for an equity
interest in Erbamont.
international specialty chemicals company.166 In 1986 Ausimont Compo paid US$55 million to
acquire Allied-Signal’s fluoropolymer plant facilities in Orange, TX, and Elizabeth, NJ.
A stricter focus on core business built the basis for internationalization: Montedison’s foreign
turnover (export + production abroad) rose from 35% in 1983 to over 40% in 1986. Foreign
production rose from 7% at the end of the 1970s to 16% in 1985 (with a 1990 target of 30%).
Unfortunately, in the 1990s, the merger between Montedison (now under the control of the
Ferruzzi group) and state-owned Enichem to create Enimont took a heavy toll. Even if Himont
was excluded from the ultimately failed merger, it was subsequently sold to Shell in order to
improve Montedison liquidity ratios (Bianchi 2003).
Nei primi anni Settanta risultavano avere una società controllata commerciale negli USA la Snia e
Farmitalia del gruppo Montedison, la Sclavo-ANIC dell’ENI (farmaceutici), la Rumianca del
gruppo Sir e la Mazzucchelli (IFI); la Pierrel del gruppo Liquigas, attiva nel settore farmaceutico,
risultava avere negli USA un investimento diretto produttivo, il gruppo Liquigas per sua parte
aveva 2 controllate impegnate in attività produttive, una in attività commerciale e una finanziaria.
Infine è interessante segnalare la presenza di un investimento diretto produttivo negli USA della
Oronzio De Nora (produzione di impianti chimici). (Cacace, 1975)
While Italy had long had a tradition in the fashion industry (including clothing and textile
manufacturing, as well as shoes and accessories), exports were exclusively supported by foreign
buyers and no direct investment was necessary.167 A new era opened after the war. Count Emilio
Pucci built on his personal transatlantic contacts to weave long-term relationships with both
Hollywood stars such as Marilyn Monroe and major New York department stores. In fact, short of
arising out of a peculiar national quest for beauty and an obsession with personal appearances,
Italian fashion benefitted from continuous interactions with the United States for its growth and
development. American mass-production techniques and technology helped Italy's fashion
industry profit from a growing Italian domestic consumerism and burgeoning ready-to-wear
markets in both Europe and America. Critical for Italian success in the American market were
U.S. media, marketing, and advertising self-interests, augmented by adaptation of Italian style to
American tastes (White 2000).
By 1965, Italian style--couture, boutique, and ready-to-wear--had become internationally
recognized and appreciated as a serious challenge to French (and American) fashion. Italian haute
couture and prêt-à-porter maisons set up their own stores and supporting sales networks.168 Gucci
became the quintessential Italian luxury brand, patronized by Jacqueline Kennedy and Grace
Ausimont Compo was the parent company for the group’s fine chemicals companies in Italy (Ausimont, MonteFluos and Dutral) and the United States (Ausimont USA and Compo Industries). See Onida and Viesti 1991.
In 1929, for instance, the United States absorbed 47% of hat exports, which in turn accounted for 4% of Italy’s
total exports (Movimento economico, 1930). The export market was very important for firms such as Borsalino (see
ASBI, Consorzio sovvenzioni su valori industriali, cart. 354, fasc. 11, p. 2, 12 August 1922).
In 1950 the Amalgamated Clothing Workers of America (CIO), the Greater Clothing Contractors Association, the
Refugee Relief Program of the State Department, the National Catholic Welfare Conference, and the Intergovernmental Committee for European Migration organized a program to transport 1,000 Italian tailors ane emply
them in the New York garment industry (see “Italian Refugee Tailors Find Jobs Waiting in U.S.,” Business Week, 12
November 1950).
Kelly, and added branches in Palm Beach and Beverly Hills and the former I. Miller store on the
corner of 54th Street and Fifth Avenue to the pioneer 7 East 58th Street (or 699 Fifth Avenue?)
store opened by Aldo Gucci in 1953 (Forden 2000, pp. 27-8).169 Gucci’s American subsidiary had
sales of US$48 million in 1978, although it was barely breaking even. Other Italian stores in
Manhattan included Roberta di Camerino, Serapian, Ferragamo … In 1976, “in an eleven-block
stretch of Fifth Avenue in midtown Manhattan, there were eleven Italian botteghe, each one
apparently striving to be the most exclusive shop on its block.”170
A new generation of Milanese fashion designers, headed by Armani, emerged in the late 1970s
and reached global fame in 1982 when Time ran a cover article on “Giorgio's Gorgeous Style.”171
These houses soon developed strong links with the U.S. fashion press and had much deeper
financial pockets than their predecessors, making it possible for them to open larger boutiques not
only in New York but also in Florida, California, Aspen, and elsewhere. For instance, in 1981
Gianni Versace opened his first American store in Miami, the city where he was ultimately killed
in 1997. Armani Brioni (1982) Ferrè Krizia Missoni Prada (1986) Zegna (1990) By the end of the
decade, the United States represented the main market for most of them.
The internationalization of mass-market production companies, which had copied the U.S.
experiences to grow, took place at a later stage and followed an incremental path. GFT, which
held 40% in a joint venture in Mexico to produce relatively cheap apparel for export to the U.S.
market, strove for a higher value investment by acquiring Riverside Manufacturing in North
Carolina in 1987 (Forti and Viesti 1994). GFT, which was already cooperating with Giorgio
Armani and had set up a sales subsidiary in the United States, also launched a partnership with
American stylist Zack Carr to produce women’s clothing. In the late 1980s, the United States
accounted for a quarter of GFT turnover (Onida and Viesti 1987). In the decade, U.S. sales rose
from US$7 million to US$250 million.172 Benetton also had a North Carolina factory, although its
large investments went towards establishing a network of franchised stores, raising from roughly
250 in 1983 to 690 in 1987, before a rationalization strategy that led to the closure of almost 400
stores in five years.173 Marzotto has also had a U.S. subsidiary since 1985. In 1991, the U.S.
employment of Italy’s 10 largest textile and clothing companies totalled 1,684, as opposed to
3,740 in Germany and 1,737 in Mexico (Forti and Viesti 1994, Tab. 8, p. 53).
Altri ID produttivi negli USA a fine 1974 censiti da Cacace
O.M.I.(telemetri) (Gepi);
Aldo Gucci’s first associate was Frank A. Dugan, who would remain counsel to Gucci for many decades (see
“Dugan, Frank Allan,” The New York Times, Paid Notice: Deaths, 1 December 2006).
“Quinta Strada,” Time, 31 May 1976. The figure is slightly different according to a previous article on The New
York Times, “the 10-block stretch between 51st and 61st Streets currently houses 11 Italian shops, or an even dozen if
the Alitalia office is counted” (“Along Fifth Ave., The Signs Have An Italian Accent,” 1 December).
According to one fashion consultant, as much as 70% of the European clothes I. Magnin and Bergdorf Goodman
merchandised at the time were Italian (“Suiting Up For Easy Street,” Time, 5 April 1982). For an earlier article, see
“Milan Comes of Age As a Fashion Capital,” The New York Times, 13 October 1977.
“New Head for Gold Toe Socks,” Fortune, 21 May 1990.
Stefanel had a less positive experience, as the number of its stores did not surpass 18 in 1989.
SGS-Ates (componenti elettronici) (Stet 60%, Fiat, Olivetti)
Liquigas (2 prod., 1 comm., 1finanz.)
Pierrel (farmac.) (1 prod.);
Oronzio De Nora (macchine industria chimica) (1 prod.; anche in Germania, Giappone e Brasile);
Carlo Gavazzi (strumentazione elettronica) (1 prod.; anche presente in 3 principali paesi OCSE );
Cinzano (IFI) (1 prod.)
In services, the Italian presence consisted mainly of banks. In 1960, the foreign bank presence in
New York was essentially limited to 36 agencies with total assets of US$3.1 billion, eight foreignowned banks and trust companies, and two investment companies with combined assets of
US$133 million. In the 1960s, the appeal of overseas markets increased, causing U.S. banks, led
by the New York money center institutions, to aggressively expand their worldwide operations.
The growing strength of the dollar made U.S. investments in foreign markets increasingly
attractive, and as U.S. corporations expanded their activities abroad, U.S. banks soon followed.
An unfavorable regulatory environment for domestic financing also contributed to overseas
expansion. Both the voluntary credit restraint program and the interest equalization tax imposed
restrictions on the financing of foreign transactions using domestic funds. In addition, the ability
to branch or acquire other banks within the United States was limited by statutory or antitrust
When Italian banks started crossing the Atlantic again in the 1970s, they did it for structurally
different reasons than in the past. This time around, the objective was to tap the liquidity of
American financial markets and assist Italian corporates in raising funds, exporting and, less
frequently, investing in the United States. BNL, that after the war had grown to become Italy’s
largest bank by far, opened its New York branch in 1962 – when it was ranked as the world’s
ninth and Europe’s third.174 Among IRI-owned banks, BCI opened its New York branch in 1969,
followed by Credito Italiano in 1973. Invariably, the East Coast remained the first destination, but
other locations followed – Credito Italiano for instance opened representative offices in Chicago
in 1973 and Houston in 1979, as well as a Los Angeles branch in 1977. Italian banks also became
more ambitious in scope – the first Italian bank incorporated in the United States was Banco di
Roma in Chicago in 1973, while BCI paid US$93 million in 1982 to acquire Litco
Bancorporation, the holding company of Long Island Trust Company in New York, that it then
sold to the Bank of New York in 1987. By 1988, U.S. affiliates of Italian banks and bank holding
companies had US$37.8 billion in assets, which put the country in the fourth overall place behind
Japan, Canada, and the United Kingdom (Graham and Krugman 1989, Table 1.7).
Sometimes such ambitious expansion plans and the multiplication of overseas locations proved
much more difficult to manage and oversee than the headquarters envisaged. For much of the
1980s, BNL Atlanta branch helped finance exports to Iraq from the United States and other
Western nations. BNL Atlanta’s first involvement in underwriting exports began with foodstuffs
but quickly progressed to other products, including military weapons. In late July 1989, two
According to the Italian version of the Stock Exchange Gazette’s rankings, published in Bancaria, No. 1, 1964, p.
747. That year, Italy had the third largest contingent among the world’s top 500 banks (67, against 272 for the United
States, 68 for the United Kingdom and 32 for Germany) of which ten in the top 100. Six years earlier, the largest
Italian bank was ranked 35th and there were 18 entries among the largest 500 (American Banker data in Bancaria,
1957, No. 2, p. 1078).
employees contacted told the U.S. Attorney’s office in Atlanta that the branch manager,
Christopher Drogoul, had made, according to their estimates, more than US$1 billion worth of
unauthorized loans to Iraq. FBI agents and U.S. bank examiners raided BNL-Atlanta at the close
of business on 4 Aug 1989, and Bank of Italy officials secured BNL’s Rome headquarters. Those
investigations resulted in seven guilty pleas including those of BNL's Atlanta branch manager,
Christopher Drogoul, and five other employees.175 In September 1993, Drogoul pleaded guilty to
concealing billions of dollars in loans to Iraq, most of which was not guaranteed by the
government, in violation of the bank's own internal limits and also in violation of state and federal
laws requiring accurate disclosure to government banking authorities, including the Federal
Reserve. Drogoul was sentenced to 37 months in prison. In 1991, the Federal Reserve issued a
cease and desist order enjoining BNL's Atlanta branch from continuing its fraudulent practices
and assessing a deficiency penalty. In 1995, the Department of Agriculture’s Commodity Credit
Corporation paid BNL US$400 million in settlement of the bank’s claim for over US$450 million
filed against the United States in the U.S. Court of Federal Claims.
Table x. Italian Banks in New York
Until World War I
Intra-war years
After 1992
Fully-licensed branches
Italian Saving Bank of the City of
New York (1896-1932), Banco di
Napoli (1911-1941), Italian Savings
& Loan Association (1920-1939)
Discount National Bank of New
York (1918-1927), Banca Nazionale
del Reduce (1921-1923), Italian
Credit Union (1922-1958), Banca
Commerciale Trust Company (19241939), Banco di Sicilia Trust
Company (1925-1941), Banco di
Napoli Trust Company (1930-1941),
Italian Cloak Makers Local #48
Credit Union (1941-1946), Italian
Dressmakers Local #89 Credit Union
Banco di Napoli (1949-), BNL
BCI (1969-), Credito Italiano (1973),
Banco di Roma (1973), Banco di
Nazionale dell’Agricoltura (1980-),
Banco della Svizzera Italiana (19812000), Banco Ambrosiano Veneto
(1982-2000), Monte dei Paschi di
Siena (1983-), Cariplo (1985-2001),
Banco di Santo Spirito (1988-),
Banca Cattolica del Veneto (19892000)
Cassa di Risparmio di Firenze (1994), Cassa di Risparmio di Verona,
Representative Offices
BCI (1918-1941), Credito Italiano
(1920-1941), Banco di Roma (19221941)
On the political implications of the scandal, see “Lone Wolf Or a Pack of Lies?,” Time, 26 October 1992 and
Whitby (2001).
Vicenza, Belluno e Ancona (19941997), Banca San Paolo di Brescia
(1994-1999), Banca Carige (19942000), Rolo Banca 1473 (19942002), Banca Popolare di Novara
(1994-2002), Banca Toscana (19982002), Banca Antoniana Popolare
Veneta (2000-2003)
Fully-licensed branches
Representative Offices
Until World War I
Intra-war years
After 1992
Additionally, due mention must be made of a different Italian investor who made his mark in the
United States, Michele Sindona. One of Milan’s preeminent financiers, Sindona rose to
prominence by representing a number of important American firms, such as Crucible Steel, in
Italy.176 In 1963, his Liechtenstein-registered holding, Fasco, joined forces with Nestle and
Paribas to make an expected and “upsetting” entry into Chicago-based food packer Libby,
McNeill & Libby. In fact this early example of an hostile takeover by foreign interests woke up
American business to the new reality of international finance, in which the European pupils
seemed to learn fast from their teachers.177 In 1964 Pasco got a substantial foothold in another US
company, Brown, a Berlin, NH paper company. The combined value of the two transactions was
US$16.6 million, certainly not a minor sum at the time.
Sindona was also a member of Propaganda 2, a Masonic lodge which tried to undermine Italy's
parliamentary system, and had clear connections to the Mafia (Cornwell 1984). In 1972, he
bought the Franklin National Bank on Long Island from Lawrence Tisch. Two years later,
Sindona’s Banca Privata Finanziaria and Banca Unione collapsed shortly after they were merged,
with losses estimated at more than US$200 million. This led to the 1974 Franklin bankruptcy, one
of the biggest in U.S. banking. In 1980, Sindona was convicted a 25-year prison term in New
York for fraud, perjury and faking his own kidnapping. He was extradited to Italy in September
1984, where he received a life sentence for the 1979 murder of Giorgio Ambrosoli, a lawyer
appointed to liquidate his failed Banca Privata Italiana. He was poisoned in prison in 1982.
In 1950, Generali took over a controlling stake in Buffalo, an insurance company based in New
York state, and in December 1952 the US branch of the General Insurance Company of Trieste
and Venice was established. An important partnership with Aetna Life & Insurance, the largest
“He’s building a business bridge”, Business Week, 10 October 1964.
“Going international – in reverse”, Business Week, 10 August 1963. A combine made up of Fasco investment
company and a subsidiary of Banque de Paris et des Pays Bas agreed to put up more than $14 million to buy a 20%
interest in the Chicago-based food processor, Libby, McNeill & Libby. Only a few weeks earlier De Gaulle’s
government had criticized Libby for its plans to set up a major canning operation in the south of France. “Welcome
Invaders,” Time, 24 May 1963.
multi-branch group in the United States, was signed in 1966, under which each company provided
reciprocal services to the other’s clients while abroad. Since 1966, the branch’s operations have
been managed by wholly-owned Genamerica Management Corporation. In 1990, the branch
changed its name to Generali-United States Branch.
Also in the services industry, Rizzoli opened a 712 Fifth Avenue bookstore in 1963 that is only
one part of an art-world project that also publishes its own art and architecture books and has
locations in other cities.178 The Rizzoli Building was owned by the Carraro family of Milan and
was sold to the Steadsol group in 1984, together with another building at 2 West 56th Street.
Since the Rizzoli Building had been identified in a 1979 study as a prime candidate for landmark
status, the project to assemble the parcel (which also included the adjacent Coty building) for a
proposed 44-story office-residential tower stirred a long controversy.179 Rizzoli then moved to 31
West 57th Street, the old Sohmer Piano Building designed by Randolph Almiroty.180 It also
bought Scribner Book Store in 1984, selling it to the Benetton Corporation in 1988.181 The other
old lady of Italian publishing, Arnaldo Mondadori, had opened a small American office in 1951,
headed by Natalia Danesi Murray, who in 1966 was appointed as vice-president of Rizzoli in the
United States.182 (1901-1994). In the mid-1980s, Mondadori was on the verge of buying the
Atlantic Monthly Press, one of the dwindling number of independent book publishers, but the deal
ultimated faltered.183
[ci sono poi in Canada le cartiere per produrre (Cartiere Binda, Burgo e di Tolmezzo; e C.R.D.M.,
gruppo Efim)
Italian business in America since 1992
Since the early 1990s, Europe, and Italy in particular, have seen their growth rates relative to the
United States (and in fact the rest of the world) slow down considerably. Although the lira
devaluation in 1992 opened up new trade opportunities, mounting corruption and political
instability arose new concerns about unemployment. In the run-up to creation of the European
internal market and the introduction of the Euro, Italian business seemed weak and the country
started being described as the weak man of Europe. It is against this background of different
elements that seem hardly conducive to any serious modernization – relatively less educated and
scarcely language-proficient population, powerful trade unions, unstable political environment,
“Rizzoli grows from ‘Museums’ to Book Chain,” The New York Times, 22 August 1984. In 19xx Rizzoli also
bought City & Company, which publishes books about New York.
“Dollars vs. History on a Fifth Ave. Block,” The New York Times, 15 February 1985.
“Once, Long, Long Ago, It Was the City’s Rue de la Paix,” The New York Times, 30 October 2005.
The building was designed by Ernest Flagg, Charles Scribner brother-in-law, in 1913. The exterior and interior are
designated landmarks. “Hemingway, Fitzgerald, Wolfe - and now Benetton,” The New York Times, 6 October 1996.
Natalia Danesi Murray was born in Italy in 1901 and migrated to the United States in 1924. She married William
B. Murray (who ran the New York branch of William Morris, the talent agency) and later had a long affair with Janet
Flanner, the American journalist and writer. During WWII, Danesi Murray directed the press bureau, Office of War
Information, and in 1945 headed the Special Projects Division of the United States Information Service in Rome.
“Atlantic Monthly Press Is Sold by Zuckerman,” The New York Times, 22 May 1986.
and unfavorable business climate – that Italian business has made an unexpected – albeit still
tentative, slow and incomplete – transformation towards multinationalization.
The traditional market-seeking motivation has remained of paramount importance, especially
when a productive presence in the United States is seen as necessary to jump over tariff and other
trade barriers. The case of pasta makers is exemplary as they have been motivated by the desire to
cash in on America’s voracious appetite for pasta of all kinds, as well as by the need to contour
tariffs imposed by Commerce Department in 1995. Barilla, which then controlled 33% of the
Italian market, opened a US$115 million factory in Ames, IO, in September 1998.184 More
recently, Fila, a producer of writing instruments (pens and pencils), reacted to the strengthening of
the euro vis-à-vis the dollar by buying one of its main U.S. competitors, Dixon of Orlando, FL,
and its low-cost plants in China and Mexico.185
The United States also played a non-insignificant role in Parmalat’s global growth (Goldstein
2004). The first acquisition was Atlanta Dairies, one of Georgia’s three largest milk producers, in
1993. Looking for a springboard into the U.S. milk market, Atlanta’s attraction seemed to be its
Olympic visibility – “enough to make any marketing organization really excited” according to the
president of Parmalat America. It then purchased six dairies in 1998-99, most of them small, all in
the East and most of them in New Jersey, boosting company sales by almost US$ 500m. In the
late 1990s Parmalat targeted the biscuit and cracker industry, traditionally dominated by two
companies – Nabisco (a division of Kraft) and Keebler (a division of Kellogg) – that compete in
most markets across the country and in most product categories. By acquiring Archway and
Mother’s Cake & Cookies, both held under holding company MA Holding, from Specialty Foods
Parmalat has become a leading actor within the second tier. With supermarkets open seven days a
week, some round the clock, American consumers treat fresh milk as a commodity and they have
traditionally proven less than enthusiastic about shelf-stable and proprietary products. Best-known
for its long-life, boxed milk, Parmalat faced obstacles in establishing its name in the marketplace
as a fresh milk producer, despite a US$ 24m investment to change the existing fluid plant to full
corrugate and build new construction housing ESL and UHT processing facilities. The early move
to replace the well-known Atlanta Dairies’ name with its own did not go down well with
consumers. Faced with evaporating sales for a product priced up to US$ 1 more a gallon than
private-label store brands, Parmalat reintroduced its products as Parmalat Atlanta Dairies –
enabling the company to turn a profit in 1996. Having signed an exclusive agreement in 1996 to
distribute Coca-Cola’s new line of Minute Maid fresh juice products in Georgia, Parmalat also cooperated with the international beverage behemoths to market their products with high-visibility
display cases at convenience stores.
Parmalat then decided to extend its operations to the state of New York, and has indeed remained
the only foreign-owned firm left in U.S. fluid milk markets. To match the different requirements
The Parma-based company also launched a radio campaign which, for a US$300,000 investment, succeeded in
raising its market ranking in the New York market from 58th to second (Villa XXXX). In 1952, Pietro Barilla had
travelled to New York to observe packaging, advertising, production, and distribution methods. This resulted in the
decision to invest heavily in advertising, charge well-known graphic designer Erberto Carboni with creating a new
image, and make the “Barilla blue” background the standard for all packaging.
In a recent book on the restructuring of Italian industry, Salvatore Rossi defines this strategy of reacting to
exogenous turbulence through even more ambitious reactions a “queen attack.”
of American consumers, Parmalat also partnered with Combibloc, a competitor of Tetra, to
develop an innovative easy-to-open packaging. The company appeared to set its own pace,
considering consolidation more than gobbling up companies, although this also meant losing out
against Dean and Suiza when bidding on proposed acquisitions. In its diversification approach on
the U.S. market, the company emphasized its Italian roots, opening Gelateria Parmalat in
Buckhead, an Atlanta suburb, in 1995. The frozen confection was reportedly creamier than
traditional American ice cream, the range of flavors broader, and the shop, designed by a pair of
Italian architects, more “high-tech”. In 2000-01 a line of functional refrigerated milk products and
the Gelato Mix flavored milk drink were also launched. The latter was awarded a trade prize as
one of the industry’s best launches for 2001. To generate interest among kids, the company
teamed up with Sesame Workshop/Columbia Tristar Television Distribution to license the use of
Dragon Tales and its logo on the milk boxes. The launch was successful as the product is
merchandised in the juice box aisle and its addition to the product portfolio increased sales of half
pints by about 20 per cent.
Beverage maker Campari is another Italian brand that has been active in recent years, introducing
Skyy Spirits, a new vodka drink, and buying Martin Miller gin and Glen Grant whiskey in 2005.
Campari Usa had been established in 1980, but at then time the Milan headquarters did not have
the necessary resources to increase market share (Vergani 1990, p. 224). Interestingly, Campari’s
name was already famous in the United States for very different reasons. The inside front cover of
the November 1983 issue of Hustler featured a “parody” of an advertisement for Campari Liqueur
entitled “Jerry Falwell talks about his first time.” Jerry Falwell brought this diversity action in the
United States District Court for the Western District of Virginia, stating in his complaint that
publication of the ad parody entitled him to recover damages for libel, invasion of privacy, and
intentional infliction of emotional distress.186 In 1988, in Hustler Magazine, Inc. v. Falwell, the
United States Supreme Court held that the First Amendment’s free-speech guarantee prohibits
awarding damages to public figures to compensate for emotional distress intentionally inflicted
upon them unless they can show that the statements that gave rise to the distress were false and
that the person that made those statements knew they were false or acted with reckless disregard
for the truth in making the statements. Hustler’s parody did not satisfy this standard, and so the
Court reversed a jury verdict in favor of Falwell awarding him US$250,000 in damages.
For resource-seeking motivations, the exemplary case is that of Eni, that in 2005 purchased the
assets of Armstrong Alaska, including 104 oil and gas leases on the North Slope encompassing
341,500 gross acres onshore and offshore in state and federal waters.187 Eni has shown recent
interest in LNG in the United States, taking capacity of 600 million cubic feet daily for 20 years at
the proposed Cameron terminal in Louisiana.
Possibly the most interesting new development is the increasing share of FDI deals that are driven
by the strategic need to seek assets of different nature. Sometimes these acquisitions are global
and the interests which are taken over in the United States are only a part of the deal. Founded in
This parody was modelled after actual Campari ads that included interviews with various celebrities about their
“first times.” Although it was apparent by the end of each interview that this meant the first time they sampled
Campari, the ads clearly played on the sexual double entendre of the term.
Eni also inherited Armstrong’s minority working interests with Pioneer Natural Resources and Kerr-McGee in
northern Alaska, including the proposed Oooguruk and Nikaitchuq developments.
1947 by several former DuPont employees, Chemtex employs more than 800 specialists that
provide engineering, procurement and construction management (EPCM) services to process
industry customers worldwide. Originally based in New York, the company was purchased by
Mitsubishi Corporation in 1989, relocated to Wilmington, NC in 1999, and was finally acquired
by Gruppo Mossi & Ghisolfi of Tortona in December 2004. Chemtex maintains EPCM capability
in both Mumbai and Bangalore in India and at Shanghai and Beijing in China, set up an Italian
subsidiary in 2005, and has recently opened an additional engineering center in Philadelphia. The
acquisition of Pioneer Investments by Unicredit (then known as UniCredito Italiano) was partly
similar since the Italian bank had very little skills in asset management at the time. The Bostoncompany, on the other hand, operates in 17 countries, employs over 1,700 people and manages
€121 billion worth of assets. Its flagship U.S. equity fund, Pioneer Fund, is the fourth oldest U.S.
mutual fund. Alpinestars is a world leading manufacturer of professional racing products, highperformance apparel, technical footwear and clothing. Its offices in Torrance, CA, are an integral
part of a sophisticated business model built on innovation, continuous interactions with customers
and suppliers, a multi-country supply chain (Corò and Micelli 2006).
Sometimes, for Italian multinationals U.S. acquisitions have been a strategic tool to participate
actively in a global consolidation movement. NYSE-listed Luxottica has made no fewer than three
big-ticket acquisitions in the last decade. In 1995 it bought US Shoe, a specialty retailing
company whose optical division, Lenscrafters, is the largest group of optical superstores in North
America.188 Sunglass Hut, another specialty niche retailing, was acquired in 2001 in a cash tender
and in June 2007 Luxottica took over sunglasses maker Oakley in an all-cash deal worth about
US$2.1 billion. This has made the company the industry’s No. 1 player worldwide, with the sports
brands, luxury brands and optical retailers. Novamont bought the Eastar Bio co-polyester business
from Eastman Chemical and became a global leader in biodegradable polymers. A serendipitous
trajectory is that of Mondadori, that in 2001 created a Spanish publishing powerhouse (Random
House Mondadori, RHM) from the joint venture with Germany’s Bertelsmann. RHM now sells in
the U.S. market through Random House Spanish.
Finally, there are a few cases of portfolio diversification. In December 2006, Ifil, the holding
company of the Agnelli family, bought 67.5% of Cushman & Wakefield, the property services
company, from the Rockefeller Group for US$563 million.189
In 1982, current CEO Claudio del Vecchio, then 25-year old, moved to New York to manage Luxottica’s small
American operations. He soon bought Luxottica’s distributor, Avant-Garde, and contributed in the rise of its turnover
from US$28 million to US$100 million. In 2001, Retail Brand Alliance, a company privately owned by del Vecchio,
acquired Brooks Brothers from Marks & Spencer. See “Claudio Del Vecchio: “Gli Americani? Ci snobbavano””,
Economy, 29 June 2007.
Rockefeller is owned by Mitsubishi Estate of Japan.
Italian business in America in comparative perspective
What have we learnt from this long excursus, not only about the U.S. investments of Italian
multinationals, but also more generally about Italian big business and its internationalization? Is
there anything distinctively Italian in that country’s international direct investments, particularly
in the United States? How have Italian investments in the United States differed from those of
other nationalities? Have Italian businesses in the United States become more alike over time with
those of other European countries?
First, Italy is a late-comer and until the recent past preciously few of its firms have accumulated
the necessary ownership advantages to expand internationally, a fortiori in distant markets such as
the United States. While, by the 1880s, French, Dutch, Japanese, and other MNEs were all
investing in the United States (Wilkins 1982, 2005), the Italian business system was still largely
incipient. But context is important and is always evolving, thus opening new opportunities to new
comers such as Italian business. Fiat, Gualino, and the banks all took advantage of such
opportunities, although the overall size of Italian investments never reached very considerable
proportions. WWII provoked a discontinuity in Italian FDI in the United States, although not on a
size comparable to Germany and Japan. In the 1950s Olivetti was the first Italian company to
place a large bet in the U.S. market, one which partly failed and to some extent hunted Italian
executives for the next decade. In fact, it has only been in the 1980s and them more decisively in
the 1990s that we see the number of individual plants, products, and companies in the United
States owned by Italian enterprises grow rapidly
Second, for the best part of the 20th century, the international expansion of Italian financial and
non-financial companies was linked to the presence of an ethnic community. This was also true
for the United States, although the modalities were different from those of South America. In
Argentina and Brazil, Italian banks supported the entrepreneurial projects of Italian migrants and
the internationalization of Italian corporations. In North America, on the other hand, the banks
tried to intercept the savings of Italian-Americans to fund projects in Italy (and in the African
colonies). An interesting related finding comes from Pirelli which invested abroad very early on
the basis of an advanced technology and by the 1920s was really a global multinational by any
standard. In the first phase of its multinational development, Pirelli became a global manufacturer
of cables and electrical conductors, sharing costs and risks with local partners in Argentina and
Spain (Barbero 1990).190 Moreover, all investments in the tire sector were located in countries
where Pirelli had already invested in the cable and conductor sector.191 In the USA, on the other
hand, local tire producers were much larger and the financial need generally higher, this hindering
the ambitions of Pirelli, which had no presence in the cable and conductor sector. This made it
problematic for Pirelli to exploit its significant organizational capabilities to transfer
entrepreneurial and managerial advantages across industries and countries. qui però sarebbe utile
vedere se negli archivi c’è qualcosa su pour parler con investitori americani
In Spain, Argentina, and other less advanced countries, Pirelli replicated the strategy used in Italy of securing
captive contracts for its cables by investing in electrical companies. See Montenegro (1993).
The first phase investments in cable and conductor created favourable conditions for other fdi: the presence of
Pirelli’s own cable and conductor factories and its trading companies, permitted the exploitation in tyres of good
market knowledge and the prestige of a known trade-name; opened the possibilities of a wider distribution of losses
and cost saving on established structures. See Montenegro (1993).
A third crucial finding is that Italian firms, even when they had the necessary firm-level
advantages, forfeited the opportunities because they lacked an open attitude to international
collaboration. Here the example of Montecatini’s incomplete internationalization is paradigmatic.
In the 1950/60s Montecatini was uncomfortable with collaborations with much bigger partners,
based its development in petrochemicals on internal innovation efforts, and ultimately
underplayed the essential value of foreign research collaborations (Bottiglieri 1990 and Fauri
2000). Montecatini refused to enter into cooperation agreements with DuPont for polypropylene
production, when doing this would have eased patent granting by USPTO and penetration on the
US market (Lanzavecchia et al. 1996, p. 255).192 Pirelli’s attempted cross-border mergers and
acquisitions similarly highlight the intrinsic limitations of family capitalism insofar as the fear of
relinquishing control constrained management options. In fact, American executives working in
Italian subsidiaries were generally struck by the contrast between the large number of flamboyant
industrial captains and the shortages of middle-level executives.193
Fourth, by and large, Italian firms have had no major problems controlling their U.S. operations in
a purposeful fashion. This run counters to the findings of Gómez and Jones and probably reflects
the much smaller scale of operations of Italian firms relative to such European giants as Unilever
and Nestlé, which were reluctant to become too closely involved in the affairs of U.S. affiliates
through fears of anti-trust legislation. A complementary hypothesis is Italian firms did not even
try to persuade top-notch local managers, and preferred instead to send their own best managers to
the United States to gain experience in the world’s most testing market. Although the
management style at large Italian companies remain relationship-driven and probably more formal
than at their US counterparts, differences in management style and culture have become more
In fact, a striking constant over this long period is the strength of the personal networks and
relationships that Italian industrial captains built with their American counterparts. Alberto Pirelli
was a personal friend of GE President Owen D. Young, a fellow member of the Dawes
committee. As president of the International Chamber of Commerce, he outlined the amazing
financial and industrial progress of the United States and praised its liberal ideas to many an
In fact, the problems run even deeper. The new petrochemical paradigm resulted in a substantial discontinuity, as
wider scale and scope economies made the investment needs much greater than in the past (Amatori 1990).
Montecatini diversified away from polypropylene, exceeding the limits of its own financial and managerial
possibilities until “the need of external resources became clear” (Saviotti 1990). Montecatini was keeping in the 50s
an aggressive stance to remain in control of the home market: pur non avendo più nel secondo dopoguerra la
sufficiente forza finanziaria e politica continuava a tentare di mantenere una posizione dominante sul mercato chimico
nazionale, ostacolando le iniziative di entrata e associandosi ad ogni nuova iniziativa esterna che non riusciva ad
arrestare; non comprendere la non ulteriore praticabilità di questa impostazione strategica in un quadro di crescente
apertura commerciale, avrebbe condotto il gruppo alla crisi. La Montecatini aveva conseguito dei risultati importanti
con mezzi “artigianali” rispetto all’organizzazione dei competitori internazionali, ma mentre un approccio empiricista
poteva funzionare in mercati relativamente protetti e facili, vicini, risultava perdente di fronte all’intensificazione
della concorrenza internazionale tra gli anni cinquanta e sessanta: i suoi successi in un quadro di ritardo manageriale,
organizzativo, di impostazione dell’attività innovativa ponevano le premesse di un declino competitivo. See
Bottiglieri (1990).
“Land of Autocratic, Energetic Business Giants,” Time, 12 January 1962 and “First Italian Foreign Investment
Seminar Staged by Chamber,” Trade with Italy, June 1961, respectively.
audience in Europe.194 Marella Agnelli, famously photographed by Richard Avedon, was one of
the lunching ladies to whom Truman Capote played the pet and confidant – as Martha Graham
recounts in her memories. The New York Times obituary of Gianni Agnelli appeared on Section A,
Page 1 and run for 2,566 words – that of a comparable business figure, Harry Oppenheimer of
Anglo American fame, was 38% shorter, and that of .195 In a mesmerizing recent example of the
enduring fascination of (some) Americans with the Agnelli family, a New York Times book
reviewer describes someone’s hair as “Euro-wavy like a Fiat heir’s”.196
Fifth, despite the oft-heard argument that the United States is the most attractive place in the
world to invest, its business environment has at times proven difficult, if not unpredictable, for
Italian firms. The American market might be seen as an “American dream” but in practice it is
one of the toughest in the world, both because of its size and because of the highly aggressive
behavior of competitors. Olivetti proved to be a case study of the corporate problems that arise
when a foreign firm pays too much for a poor company in order to gain a foothold in the United
States. More than a decade later, a group of New York City secretaries, backed by members of the
National Organization of Women, a feminist organization, picketed the headquarters of Olivetti.
They were infuriated by ads promoting “brainy” typewriters that are supposed to eliminate some
typing errors made by dippy-looking secretaries.197 In the TV commercial, the secretary was
shown as a vacuous sex kitten who finds that she can attract men by becoming “an Olivetti girl.”
In 1995, the Georgia Department of Agriculture, suspended the Parmalat plant’s license for one
day, citing New Atlanta Dairies for continued violations of codes with unsanitary and
malfunctioning equipments. The company was then delivering thousands of 8-ounce cartons to
city schools, which served them with breakfast to 20,000 children and with lunches to 43,000. The
following year a similar problem surged following a U.S. Food and Drug Administration warning
that linked the company to possibly contaminated cream cheese (mascarpone) imported from
Italy. Although in both cases Parmalat was cleared, its image was tarnished.
Fast-forwarding to 1997, Generali’s image in the United States was hit by a legal battle
concerning claims on life insurance policies sold to victims of the Holocaust.198 Victims of the
Holocaust and their heirs struck a deal in January 2007 with Generali, although lawyers who are
refusing to participate in the settlement and other Holocaust experts say that the deal will also
prevent tens of thousands of other Holocaust victims and their heirs from being compensated, just
as new evidence on unpaid insurance policies is being uncovered in Europe. The settlement
“Praises Liberal Ideal of American Business,” The New York Times, 30 June 1928; “Pirelli Tells Britons of
American Progress,” ibid., 21 November 1928; and “American Progress ‘Astounds’ Pirelli,” ibid., 7 May 1929.
See “Harry Oppenheimer, 91, South African Industrialist, Dies,” August 21, 2000 and “Giovanni Agnelli, Fiat
Patriarch And a Force in Italy, Dies at 81,” January 25, 2003; “Umberto Agnelli, Quiet Member of Fiat Dynasty, Dies
at 69,” May 29, 2004, was 1, 079-word long.
“A Hard Bloke,” The New York Times, 27 May 2007.
“Rebel Secretaries,” Time, 20 March 1972.
As lawyers first began investigating Holocaust insurance claims in the late 1990s, they filed lawsuits against more
than 20 European insurance companies. All of the lawsuits except those against Generali were eventually dropped or,
in the case of German insurance companies, resolved through a settlement between the United States and Germany.
See “Holocaust victims settle with Generali,” The New York Times, 30 January 2007.
provides no acknowledgment of assertions by Holocaust survivors that the insurance company,
like many other European insurers, routinely refused to pay death benefits for Jews who died in
concentration camps and sometimes demanded copies of policies and death certificates from
families who had lost everything. Generali says it was never the company's policy to deny valid
claims and in the settlement papers denies any wrongdoing.
The sixth finding provides one possible, albeit certainly partial, explanation for such situation.
Petrelli (2005) has argued that Italian investors in New York and elsewhere in the United States
have made little efforts to promote the national culture and language, seeing these as strictly nonbusiness activities to be left to government institutions. In this they differed from German and
Japanese firms, which on the contrary saw a continuum between business and cultural promotion.
This limitation has extended to the broader area of research and teaching of Italian-American
relations. ADD SOME DATA ON IVY LEAGUE UNIVERSITIES To make things worse,
government institution has done very little to support the internationalization of Italian business,
and this is not a new problem. In 1921 already the Italian Chamber of Commerce in New York
lamented that diplomats “are neither morally, nor financially in a position to implement [business]
functions that should warrant much more substantial allocations in their support”.199
Finally, we have also tried to understand the extent to which Italian firms with U.S. investments
transferred back to Italy what they learnt in America and to what degree has Italy in the broader
sense benefited from FDI in the United States. Here the story can only be told on the basis of a
few anecdotes on what is now known as “talent mobility”. Olivetti’s Esterino Piol managed the
only Italian venture capital fund in New York, before he went on to become an independent
venture capitalist in Milan. Similarly, ATC was a huge bank of talent and opportunity. A number
of former Olivetti stayed on in the San Francisco Bay Area, and most members of the Silicon
Valley Italian Executive Council (SVIEC) are said to be former Olivetti employees.200 A
particularly successful ATC alumnus is Guerrino De Luca, the CEO of consumer-electronics
company Logitech International, a company whose helm he took in early 1998. Logitech,
incorporated in Switzerland and with headquarters in Fremont, CA, was then known mostly for
selling mice to PC makers and today sells webcams, wireless keyboards, game controllers and
Andre Meyer, who ran Lazard after the war, and Enrico Cuccia, Mediobanca's founder, were
allies and pioneers in modern financial engineering. In 1956, Lazard took a stake in Mediobanca.
That connection is also unraveling now.
“Diplomazia commerciale,” La Rivista Commerciale, 21 August, p. 2 (our translation). One week later the
magazine returned to this issue, only to further stress the inability of Rome-based bureaucrats to understand what was
needed to promote Italian firms in New York (“A proposito di Diplomazia Commerciale,” ibid., 28 August, pp. 2-3).
ATC Cupertino professionals included Enzo Torresi (president in 1979-1982), Tiziana Perinotti (the Olivetti
representative in Redmond during a joint venture OEM project with Microsoft to develop the international Windows
2.0 release and the Windows version for the first 386 PCs), Piero Scaruffi, Giampiero Caprino, Marco Paganini,
Gianmaria Clerici, Marco Graziano, Gunjan Sinha, Peter R. Jones, Salvatore Amato (now at University of Siena),
Antonella Fresa, Mauro Meanti (Microsoft EMEA), and Giovanna Petrone and Marino Segnan (now both at
University of Turin).
In the end, what can Italian companies today take away from the experience of their predecessors
in the United States? That history in general – and business history in particular – is about change
and change is not linear. Generalizations that are legitimate in one period may not be valid
subsequently. Case studies of single firms over long periods of time can provide a powerful means
to explore central issues such as knowledge transfers and cross-cultural learning processes within
multinational firms.
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Annex Table 1.
Majority-Owned Nonbank U.S. Affiliates of Italian Companies
Assets %
VA %
Sales %
Assets %
VA %
Sales %
Assets %
VA %
Sales %
Assets %
VA %
Sales %
D Suppressed to avoid disclosure of data of individual companies
FDIUS: Operations of U.S. Affiliates of Foreign Companies, revised estimates 1977-2001,
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Annex Table 2.
Pirelli purchases cable activities.
Italcementi buys 33% stake of R C Cement.
Pirelli fails to take over Firestone and ends up buying Armstrong.
Pirelli Armstrong Tire Corporation sold its Des Moines tire plant to Titan Wheel International Inc
Marangoni Tread North America starts production in Madison, TN.
Fly UP