Pirelli, Company History
The history of Pirelli coincides with the history of the tyre industry. Founded in Milan in 1872, Pirelli & C - the original name of the company founded by Giovanni Battista Pirelli, a 24-year-old engineer - was initially a factory producing rubber articles. But the process of product diversification began immediately, introducing those elements of innovation and quality that still characterise the company today.
So Pirelli started to produce insulated wire for telegraphy, submarine telegraph cables and, eventually, the first bicycle tyre. The first car tyre, the "Ercole" was made in 1901.
With the new century came the first sporting victories (the Peking-Paris race, in 1907) and the process of international expansion began, with the opening of new plants in Spain (1902), Britain (1914) and Argentina (1917).
In the 1920s Pirelli developed the innovative Cord technology, and its tyres started to be used in automobile races, marking the start of a journey that has led to the present day, crowned by many victories in Formula 1, Rally, Superbike and other championships, as well as in the famous Mille Miglia. It is in precisely this period that Pirelli started production of the first range of cables with innovative oil insulation.
Again in the early years of the 20th century, on a far off day in 1908, the elongated P that would make Pirelli famous throughout the world was born. The scene is New York in its period of explosive growth, a tangle of dusty streets and tightly packed buildings, where Pirelli's business manager has arrived to meet the local representative. They don't have a sign, or rather, a distinctive mark for the Italian product, able to stand out in the jungle of commercial signs of the time. It was from a sketch drawn by the former on a piece of paper that, almost by chance, that odd P was born - so odd that it drew attention to itself, because of its unusual shape. Certainly, neither man imagined that they had made such a decisive contribution to the birth of a brand celebrated in the worlds of industry, design and fashion, and in all those sectors in which Pirelli has been able to express its creativity and its industrial model.
The birth of the elongated P marked the start of a history of excellence and industrial innovation in both the tyre and the cable industries. At the start of the 1950s, Pirelli developed the revolutionary "Cinturato", or radial tyre (which has in fact been recently resurrected with avant-garde and eco-compatible solutions), an innovative product for sports use, a product that could for the first time guarantee great road-holding when cornering, and at high speeds. In the meantime, foreign expansion continued, with the purchase of Germany's Veith Gummmiwerke in the tyre sector, and the start-up of cable manufacturing plants in Australia and Peru. In the 1960s, in Italy, the company opened plants in Settimo Torinese for car tyres, in Villafranca Tirrena (Messina) for motorbike tyres, and in Giovinazzo (Bari) for plastic cables.
After the industrial success of its radial tyre, Pirelli introduced a new range of tyres in the mid-1970s, the P7, called low-profile tyres because of the side covering, much lower than the breadth of tread in contact with the road surface, and therefore able to increase road-holding. The brief union with Britain's Dunlop occurred at this time. In the meantime Pirelli developed a product that was destined to revolutionise the cable industry: optic fibre.
The 1980s were notable for sizeable foreign acquisitions: Metzeler, a German industrial company specialised in motorbike tyres, and Standard Telephone Cable, a company producing surface cables for the telecommunications industry. But the attempts to acquire America's Firestone and then Germany's Continental failed. In terms of production, the oil crisis led Pirelli to develop the P8, a car tyre characterised by very low rolling resistance, leading to substantial savings in fuel costs. Again at this time, with the MP7, Pirelli became the first manufacturer of radial tyres for motorbikes in the world.
The new decade started with the restructuring of the Group, carried out by Marco Tronchetti Provera, who took charge of its operations: for Pirelli the season of its international relaunch started, in which the group focussed on innovative products and technologies and, above all, on extending its business to new emerging markets such as Africa and the Far East. While the tyre sector saw a further evolution, with the launch of the P Zero range, the "three ply" ultra-low profile tyre that adapted competition tyres to normal road use, the Pirelli Real Estate property division was created.
The start of the new Millennium saw some profound changes in the tyre industry and beyond. The group patented and introduced the new MIRS production processed for the automated manufacture of high performance tyres. And while the Pirelli MIRS miniplants spread through Germany, the United Kingdom and the United States, at the Milano-Bicocca plant the futuristic automated mixing room, the CCM (Continuous Compound Mixing) started operations. In the same period, the photonics and fibre optics business of the group was enhanced by the creation of Pirelli Labs, a development engine for new technologies and the study of materials, while the property sector saw Pirelli Real Estate listed on the Milan stock exchange in 2002, after a decade of strong growth that saw it assume leadership of the Italian property market.
The consistent value generated by the sale of the first generation photonics business to the United States' Cisco and Corning is the basis for investment in telephony. The intention was to boost technological and industrial development and use the skills gained in networks to create a big telecommunications group: Pirelli's objectives took concrete form in the summer of 2001, when it became the reference shareholder of Telecom Italia, through Olimpia, a holding company created with Banca Intesa, Unicredit, and the Benetton family.
After the sale of the cable business, the process of developing the group in innovative business sectors continued, with investments in Pirelli Broadband Solutions, a leader in broadband access and photonics, Pirelli Ambiente, engaged primarily in the photovoltaic sector, and Pirelli Eco Technology, which produces antiparticulate filters. Progress in telecommunications, where Pirelli has made a decisive contribution to the development of broadband, and was the first to start integrating its fixed and mobile platforms, stopped in 2007, with the sale of Olimpia to Telco.
The revenues obtained from the withdrawal from telecommunications has allowed the Group to further strengthen its core business and implement a plan to distribute resources to its shareholders during 2008.
In line with its strategy of focusing on the tyre sector, as outlined in the 2009-2011 industrial plan, Pirelli proceeded with the disposal of non-strategic activities (Telecom Italia, Alcatel-Lucent Submarine, Oclaro, Pirelli Broadband Solutions) and concluded the separation from the group of Pirelli Real Estate, transforming itself into a 'pure Tyre company' (98% of Pirelli & C revenues in 2010 are coming from tyres) . Alongside the tyre activities, the company is also pursuing the Pzero fashion and high-tech project and in line with Pirell's 'green performance' strategy, the activities of Pirelli Eco Technology and Pirelli Ambiente, respectively operating in emission control technology and the energy and environment areas.
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