[CEF_Beasts]

Pininfarina Engineering lost crucial orders from its Hong Kong and Iran-based clients due to the pandemic crisis Under the ownership of Mahindra Group, the famed Italian design house Pininfarina initiated its move up the value chain by equipping itself with comprehensive vehicle development capabilities. Roughly two years ago, Pininfarina SpA spun off its Turin-based technical center into a standalone subsidiary under the banner Pininfarina Engineering. The new entity, currently 135-employee strong, is capable of handling turnkey vehicle development projects for global clients. Pininfarina Engineering to be liquidated Pininfarina Engineering started off on a strong note with promising high-value international projects.

The subsidiary has been working on vehicle and platform development projects for Hong Kong-based Hybrid Kinetic Group, Iran Khodro and Vietnam’s VinFast. The team has also been working on some projects for its parent brand Mahindra. With the COVID crisis affecting businesses all over the globe, Pininfarina Engineering reportedly lost its business from Hong Kong and Iran-based clients, leading to a loss of several million euros. With the outlook for global auto industry continuing to be bleak, Mahindra Group has decided to mitigate its loses by liquidating Pininfarina Engineering.

The decision to shut down Pininfarina Engineering was announced by Pininfarina SpA to the Italian trade units in October and was immediately met with resistance from its employees and concerned trade unions. The move will lead to loss of 135 jobs and the employees took to Turin’s main square to voice their protest.

Since the announcement, a few rounds of negotiations between the trade unions and Pininfarina Engineering’s management have taken place and more rounds are expected to be scheduled in the coming days. So far, Pininfarina SpA has proposed to absorb 60 of those 135 employees back to maintain an engineering division internally. However, the employees and concerned trade unions are not happy with this proposal as some of them feel that this could be a cheeky move to downsize the staff by half and pay the remaining 30-40% less.

Employees’ letter to Mahindra Group If the concerned parties fail to reach a resolution by January 15, 2021, the 135 employees are slated to be laid off. In addition to protesting in public, the employees also reportedly wrote a letter to Mahindra Group questioning its decision to liquidate Pininfarina Engineering within 2 years from establishment. In the letter, the employees argue that they are collectively qualified, experienced and competent in complete vehicle engineering projects and they cost much less than similar workforce in other countries like UK, Germany, France, etc. They end the letter by saying they do not understand how the decision to lay them off under these challenging circumstances compatible with the ethical and social guidelines declared by Mahindra and it’s Chairman.

Employees protesting in Turin, Italy.

Source: https://www.rushlane.com/mahindra-to...-12386329.html

Main Source: https://stream24.ilsole24ore.com/vid...suberi/ADSQRW4

[Shreyans_Jain]

Trust Mahindra to botch up every single one of its JVs and acquisitions. The list started with the initial JV with Ford in the 90s, and then grew with Renault, Reva, Kinetic, Ssangyong, Jawa and now Pininfarina. Every single thing they have touched has gone bust.

I do believe they are only shutting down the engineering division and not design. Still, these are the people who came up with the 1600hp electric car Battista. Potential, lost.

[saikarthik]

Originally Posted by Shreyans_Jain

Trust Mahindra to botch up every single one of its JVs and acquisitions. The list started with the initial JV with Ford in the 90s, and then grew with Renault, Reva, Kinetic, Ssangyong, Jawa and now Pininfarina. Every single thing they have touched has gone bust.

I do believe they are only shutting down the engineering division and not design. Still, these are the people who came up with the 1600hp electric car Battista. Potential, lost.

Stole my words. Add Peugeot 2Wheeler division and Genze to the list.
Also, few of the services that Mahindra started were also a flop - example, Glyd (an EV ride hailing platform).

Jawa is still surviving, though it was not able to do what it was considered to.

[aaggoswami]

Its really sad for the division to see curtains. Moreover, for an informed customer, the confidence on Mahindra brand is shaking in India. Since XUV500, they haven't tasted success except for Thar which is more of a lifestyle product. KUV100, XUV300, Marazzo, all have not lived upto expectations. Their US venture is doing well to build brand and even the tractor division is performing well. Ford has again adventured into a tie-up or so with Mahindra, and hence the trust of a buyer to put money for Ford products in India will be shaken. When XUV500 hit the market, Tata was struggling, and now its Mahindra which is just not able to dominate the SUV market. Passenger car division of Mahindra needs a serious churning for future stability. Internationally, the image is tarnished when their second investment (first was Peugeot two wheeler) in Europe is in troubled waters.

[AZT]

Originally Posted by aaggoswami

Moreover, for an informed customer, the confidence on Mahindra brand is shaking in India.

Alturas being discontinued so soon is a dumb move. Anybody spending that kind of money doesn't want to end up holding a discontinued model.

[anjan_c2007]

Mahindra's misadventures of late have been in multiple fronts. The several fiascoes after venturing here and there through new acquisitions and new launches, most of which bombed could be the subject matter of a voluminous management book for entrepreneurs, who could be cautioned against such miscalculated moves.

Such a move to close down Pininfarina Engineering and layoff not 135 or now even 75 employees sends very wrong signals from the Indian company in a developed and democratic country, more so because it is a long standing member of the EU. The Covid-19's negative impact on worldwide business and commerce has been widespread. Even JLR and Corus Steel (Tata Steel, Europe) of the Tatas in the U.K. are in a bad shape. But we are yet to hear of closures or employee layoffs there.

At the end of the day it seems only the tractor and farm equipment segment and the two ageing UV/SUV's Bolero and Scorpio are their real bread and butter. And it's not unexpected that Tata Motors (21,640 units) and now Kia Motors (21,022 units) have relegated Mahindra (17,971 units) to the #5 slot in the monthly car sales figures for November 2020, from its usual # 3 slot a year ago.

[RSR]

Ford Global HQ, please keep an eye on your Indian operations!

Despite having excellent products in India, due to your own laziness and inadequacies, you've chosen to hand over majority stake (51%) and operational control of Ford India to Mahindra. While it's a much better option than taking the easy way out (like your foolish compatriots at GM), this is still an ill-advised move as Mahindra have made a mess of JVs and acquisitions on more than one occassion.

I don't see Mahindra taking care of and nurturing their "step children" (Ford India products) in the same way a "parent" would {with due apologies to those step parents who do love their step children as their own}.

If Ford India were to get caught in a downward spiral, then Ford HQ must step in immediately and buy back the 51% stake and take full control again!

Vietnam’s VinFast

Not many would have heard of Vietnamese carmaker VinFast, but their rise has been nothing short of spectacular! Do google VinFast to know more about them.

Companies like Pininfarina Engineering and Magna Steyr have played a huge role in transforming previous generation BMW cars into successful VinFast ones. VinFast also sells badge-engineered Chevrolet (GM Korea) cars after buying out GM's factory in Vietnam.

Mahindra shutting down Pininfarina Engineering will have an adverse effect on the rising star from Vietnam.

[greenhorn]

Do you really think ford cares for its 'children'?
Often, divisions with large headcounts and low strategic importance are hived off to other players who don't care about reputations to do the dirty work of layoffs.

Products - they will continue developing products similar to the indian ones as they still have other emerging markets, and they will always be available for the indian partner to use - at a cost.

If you were mahindra, why would you license a ford design when you can build your own, especially when those licensed products will potentially take away sales from your own products, which earn you bigger margins?
If you are ford - how would you incentivize such a partner in a way that you get your fair share of royalties?

I somehow don't see any more of a future for this than the hero honda - harley JV

[RSR]

By "children", I meant Ford's cars in India, Greenie, and not their employees. The unfortunate, but harsh truth is that no one cares about employees.

Ford tried to sell their new Sanand factory to one of the Chinese carmakers before the Mahindra deal. For some reason, it didn't go through. Now, Sino-Indian tensions along the disputed border and the resulting anti-China sentiments in India may ensure that such a deal never goes through.

The way Ford and Mahindra have worked out this deal, it looks like Ford will use Mahindra's engines on their cars, apart from selling badge-engineered or suitably modified Mahindra products in the future. They're not going to bring in their global products, apart from a few imports in small numbers (upto 2500 units/year).

The bigger question is what will happen to Ford's exports from India. Ford exports in large numbers from India, while Mahindra exports only in small quantities.

In the future, will buyers in other countries accept badge-engineered or suitably modified Mahindra products wearing a Ford badge? I have my doubts on this.

[Cessna182]

Mahindra is going to be a case study in the future for MBA courses talking about mergers and acquisitions. Such a talented pool of employees being let go while they're busy paying crores to McKinsey type ppt makers in India to draft the plans to lay off the talented workforce. Good strategy indeed

[SandyX]

Mahindra is like a planet-killer. It goes on prowl to acquire specific targets, and lays waste whatever left of it. Here you can read what they did to the respected Australian Gippsaero, all to please some ruling elements for unknown gains. They are even making it difficult to have any chance of recovery. Gippsaero folded with Mr.M laughing his way out. The agenda was absolute destruction bordering on inhumane.

I know some people respect this brand but their acts are not keeping up with the ethics they claim to espouse. it would be sad day when their doings catch up with them because they are the only jeep(Roxor, not Thar) maker left.

Has Internal Conflict destroyed GippsAero?

When Mahindra Aerospace bought into GippsAero in 2010, the pairing looked like a perfect match destined to do great things. The Indian congolomerate wanted a fast entry into aviation and GippsAero needed money to see off the impact of the Global Financial Crisis and fund development of its GA10 single-engine turbo-prop.
At the time, GippsAero founder George Morgan said “I am sure our association with Mahindra will take the company to even greater heights and we look forward to the beginning of a new chapter in our history.”

Other than being a company short of cash, the GippsAero that Mahindra bought into was a successful company with a proven product in the GA8 Airvan. GippsAero had the know-how; Mahindra had the money. Surely the formula for success wasn't too complex.

But it has now been 10 years since the deal was done and the story is very different from what it was at the start of the chapter. Mahindra Aerospace has failed to climb those heights and is desperately looking for an exit that won't leave them too much in the red or with excessive egg on their faces.

It is believed that Mahindra sunk more than $100 million into the company, but has struggled to get a return on their investment.

If the stories coming out of the factory at Latrobe Regional Airport in Victoria are solid, Mahindra may have dug their own bottomless pit to throw that money into. No sooner had the partnership been launched than changes started; changes that hindsight reveals were intrinsic to the situation the company now finds itself in.

Those changes included new members of the management team and new engineers that had no aviation experience. Immediately they tried to put a corporate stamp on GippsAero. It was big-business thinking applied to a operation where the prime product was hand-built and economies of scale never came into the equation.

Costly new systems were brought in, driving up the cost of the Airvan 8. To preserve desired margins, Mahindra boosted the sell price of the aircraft, unfortunately to a level customers baulked at paying.

"Things worked at GippsAero because we had aviation oriented people doing it," former GippsAero engineer Max* told Australian Flying. "Once textbook engineers without real-life aviation experience were brought in, things started going backwards."

One of the very first tasks Mahindra set GippsAero was to drop work on the GA10 (rebranded as the Airvan 10) and instead build the prototype of an Indian design: the five-seat C-NM5 single-engined low-wing. The aircraft was built from the drawings sent over from Mahindra. The prototyping team worked up to 18 hours a day to get the aeroplane built, which they did successfully, even though many of those in the team had little faith in the design. It was a distraction they didn't need.

"We built it because we were told to build it," Max recalls ruefully.

It was testament to the skills of the team that the C-NM5 flew in September 2011, only 10 months after the edict to build it was passed down. Mahindra Aerospace immediately began boasting of the achievement.

“GippsAero is proud to have produced the prototype of the C-NM5 in partnership with our parent company Mahindra Aerospace,” CEO Terry Miles said at the time. “The construction of a working prototype in 10 months is an outstanding achievement for our team, and a testament to the manufacturing skills that we have nurtured within our organisation here in regional Victoria.”

The C-NM5 was then parked in the development hangar (dubbed "Dreamland" by some inside the company), where it has become the ultimate hangar queen and an obstacle for people to walk around. No further work was ever done.

By the time the team could refocus on the Airvan 10, Mahindra's team of new engineers had made fundamental changes that started the aircraft on a trajectory that GippsAero couldn't arrest. The original engineers found themselves sidelined as the corporate machine went to work on the product.

Intended to be an aircraft that was a simple step-up for pilots already flying Airvan 8s, the design concept was drifting away from its raison d'etre. Mahindra's team didn't seem to understand what the aeroplane was all about.

"Mahindra was very hard-nosed," another former GippsAero engineer, Gary* laments. "The influx of engineers were from larger projects. GippsAero's engineers had a lot of knowledge, but they were pushed aside.

"A complete disconnect occurred between what the aircraft was supposed to be and what the engineers were making of it. You could say there was some difference of opinion."

Max was more blunt in his assessment of the outcome: "Mahindra engineers stuffed it up!

"Arrogance within the Mahindra culture didn't work with the Australian way of doing things. Some upper management dictates just weren't accepted. They were too over-controlling."

Buckets of Mahindra money–much of it invested in dead ends–was needed to get the new-style SETP to a point where it could be presented for type certification. It was a lot more than it should have been, and a lot more than it could have been had Mahindra left GippsAero to develop it on their own. It seemed the same skills and abilities that CEO Terry Miles spruiked after the C-NM5 flew were not enough to turn the Airvan 10 into a marketable proposition.

Despite endemic corporate interference, the Airvan 10 passed through both CASA and FAA scrutiny to the certification stage.

On 15 August 2017, CASA Stakeholder Engagement Manager Rob Walker traveled to Traralgon to present GippsAero with the Airvan 10 type certificate. It was the second time only that a turbine aircraft had been certified in Australia.

"It opens us up into a much bigger market, the turbo-prop market," CEO Keith Douglas said when the TC was presented. "The piston-engine market is maybe 50-60 aircraft a year; the turbo-prop market is 150 per year. Cessna sells about 90 Caravans, the 750 XL maybe 30 of them.

"We're going to enter into this space, but we're not going to compete with them; we're actually going to provide the operators with another option that's not been there in the past.

"We're very, very excited about this."

But the excitement soured. Not only had Mahindra sunk more money into the project than they wanted, their own engineers had been unfaithful to the demands of the market niche the aircraft was aimed at. It's not that the certified version was a bad aircraft, it was actually quite good, but it was too distant from what the project set out to deliver.

After the first production model Airvan 10 was lost over the Mojave Desert during spin trials in 2018, Mahindra's ardour for the aircraft cooled substantially, even though Botswana company Major Blue Air later placed an order for one. It is telling that the order was never filled.

Then in 2019 came what may have been the trigger for Mahindra making escape plans: an Airvan 8 parachute plane crashed in Sweden, prompting CASA to issue a grounding order. It was taken up all around the world. Despite CASA removing the order after it became obvious the aircraft had not failed in any way, sources inside GippsAero believe it rattled Mahindra severely.

Problems such as these are part of any GA manufacturer's world; you resolve them and plow on. Imagine if Beechcraft had given up after the second prototype Bonanza crashed before the type was certified. But Mahindra isn't a GA company; it's a conglomerate that brings with it an attitude incompatible with GA.

And now, with nothing to show for the millions invested, Mahindra is looking to cut their losses. How they plan to do that is very unclear and no-one within Mahindra is talking right now.

However, there are strong indications that other companies are keen to buy GippsAero and keep it running. At least two US-based companies and one Australian organisation are known by Australian Flying to have made representations to Mahindra. Rumours talk about up to eight potential suitors.

If information is right, Mahindra is trying to recoup the losses by putting a price tag of over $100 million on the company, but simultaneously is keeping the financials close to their chest, making due diligence and a serious offer nearly impossible.

Other sources say that the company will be wound up by the end of August and the Airvan 8 tooling probably destroyed. But even those who have either moved on or been shoved out of the operation still hold out hopes that a deal can be found to enable the Airvan to continue on.

"To see it whittled down is heart-breaking," Max laments. "Much damage has been done to GippsAero.

"The upside is that the customer base still embraces the original GippsAero team and is holding its breath to see what will happen to the Airvan 8. The Airvan 8 has very strong brand loyalty; the customers know it works and know it makes money for them.

"The Airvan 8 is still a sure thing, provided someone can get control and do it sensibly."

*not their real names. Engineers spoke to Australian Flying on condition of anonymity. Mahindra Aerospace has been contacted but has declined to comment.

Wiki says this of the C-NM5, which was the sole reason for acquiring Gippsaero and its eventual destruction. Gippsaero did the work and you know whos claimed the credit.

NM5 or C-NM5 was a multi-role, multi-mission aircraft being jointly developed by National Aerospace Laboratories (NAL) and Mahindra Aerospace.[1] It is a 5-seater civil aircraft and an extension of the Hansa project.[2] The NM5 was entirely designed and developed by NAL and Mahindra Aerospace on a 50:50 partnership basis.[3] The NM5 can be used as a trainer, for transporting cargo, medical evacuation, tourism, VIP travel and for training pilots.

The engine, propeller and certified seats of the aircraft have been imported also the raw material like aluminium alloy sheets and hardware such as, nuts, bolts, washers and rivets.[1] Prototypes of NM-5 are ready and the certification will take a year.[7] The Directorate General of Civil Aviation is expected to certify the aircraft by December next year.[1] The first prototype of the 5-seater civil aircraft made its maiden flight on 1st September 2011 at GippsAero's flight testing facilities near Melbourne, Australia.

https://www.australianflying.com.au/...oyed-gippsaero

[GTO]

Originally Posted by Shreyans_Jain

Trust Mahindra to botch up every single one of its JVs and acquisitions.

So well said! I don't think Mahindra has the management bandwidth to handle as many acquisitions & mergers. In fact, even after the long list of acquisitions, Mahindra still remains predominantly a utility vehicle maker in India. And even of that, just the Bolero & Scorpio are currently selling (it was the exact same situation 10 years ago).

This will affect their deal-making in the future. Employees, governments & founders (who want their company to continue in the long term) might not prioritize Mahindra's buyout offers.

Originally Posted by GTO

Big part of the blame goes to the Mahindra Group as well. This is their usual story = get excited, acquire a company with lots of glitz & glamour, throw a party, but follow it up with awful execution. Standard Mahindra playbook. Either they suck at execution or they don't have management bandwidth.

Think about all their acquisitions & tie-ups.

- How did Jawa fare? Answer is above.

- SsangYong? Loss making, and on the block.

- Reva? Dead. Could have been a 1st-mover in mass market EVs.

- Navistar Trucks. Who???

- 4 years since they acquired BSA Motorcycles. Results awaited.

- Mahindra-Renault JV? Divorce.

- Mahindra-Ford. Marriage, divorce, and now a desperate marriage (as Ford wants out).

- Peugeot. Doesn't look pretty yet.

- Other acquisitions include Carnation, Finland's Sampo Rosenlew, Erkunt Traktor Sanayii AS and more.

In comparison, consider Tata Motors. They made ONE notable acquisition (Jaguar-Land Rover) and executed it so well. The $2 billion they paid has been long made back, and they now own one of the most high-end luxury brands in the world.

[kiku007]

Very unfortunate. I wonder if companies should blacklist bids from Mahindra. A visionless company that goes on a shopping spree across the world.

It's not without reason that the Ford family didn't want to sell JLR to Mahindra even though they had an partnership with the Mahindra group in the past.

Ford must be well aware of what to expect from Mahindra in India. Ford has the option to abandon ship if things go bad or increase their stake if things shine some day in the future. But going by history, I can sense that they are going to pin the blame surely on Mahindra when things go bad.

[Lowflyer23]

Mahindra wants to be everywhere and do everything and then ends up messing each and every venture. I had high expectations from upcoming JV with Ford, but now I'm a bit skeptical.

[srishiva]

Maybe Mahindra wants to do more and more. Hence they acquire diverse companies. You need to involve yourself more.

A little OT but... Like Mr Musk does. His involvement is from the lowest level of working on the floor to the highest level.
Although you wouldn't expect this from everyone, you need to atleast involve yourself in guiding and overseeing with lot of commitment.

Now, India's business heads have mostly inherited the companies and not used to working very hard I guess . Else why would they face such consequences. Or maybe they dont have the skill to do it. With technologies becoming more disruptive you need to be on the pulse of it. Gone are days when companies had no competition.