Winnipeg Free Press - PRINT EDITION

Shelby prospers despite founder's passing

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In the first two weeks after Carroll Shelby died, the phones at his Shelby American car company didn't ring once.

"And then when they finally did, we had people with urgency in their voices, asking if they were still going to get their cars," said John Luft, president of Shelby American, based in Las Vegas.

The short answer is absolutely, Luft says. The company that Shelby founded 50 years ago to build specialty cars like Mustang GT350s and 427 Cobras is "planning for the next 50 years," Luft said recently.

"This is ground that had never been walked -- life without Carroll," Luft said. "But Apple's not going anywhere, and Steve Jobs is no longer alive. We are focused on the next 50 years, not the last 50."

Shelby, a legendary Texas racer who developed Shelby Mustangs and Cobras in the 1960s and was a lifelong entrepreneur, died in Dallas last May after a lengthy illness. He was 89.

Shelby American is a subsidiary of Carroll Shelby International, which is a publicly held company that trades over the counter.

Even before Shelby's death, the company was in transition.

Although Shelby worked with longtime partner Ford to develop the Shelby GT500 Mustang, those cars were built in Ford factories and sold by Ford dealers.

Before the downturn in the economy -- between roughly 2006 and 2008 -- Ford had a program with Shelby American in which Ford sent thousands of Mustang GTs to Shelby American to be converted to Shelby GTs, which were sold at a healthy markup by Ford dealers.

After the economy collapsed in 2009 and the market for specialty cars plummeted, the Shelby GT was discontinued. Shelby American still builds specialty Mustangs, but it's a post-title program -- meaning people have to buy their cars first and then send them to Shelby to be converted into a GT350 or a Super Snake.

Depending on how extensively they are modified, the Shelby additions can be US$30,000 or more -- on top of the cost of the car.

In addition, the company continues to build the Shelby 1000, the last Mustang that Shelby helped develop. It's a US$200,000 monster that can be ordered with more than 1,000 horsepower.

Luft is refocusing Shelby American on selling more parts such as suspension pieces, exhaust systems and shifters to modify Mustangs, whether they are Shelbys or not.

"We fish in Shelby's pond," he said. "But the opportunity with parts is to fish in a bigger lake, almost an ocean -- and that's parts that fit on any Mustang."

Parts currently account for about 20 per cent of revenue, an amount Luft wants to increase to 50 per cent within two years.

"The days of our building 7,000 cars a year are long over," he said. "Carroll always said forget the highs and lows. Identify your sweet spot, and right now, our sweet spot is 400 to 500 cars a year. And as we continue to develop the parts side, we may find that the sweet spot is 300 cars."

Although Luft and Shelby American CEO Joe Conway declined to provide financial numbers for the company, Automotive News reported that Shelby American expects earnings last year of about US$2.5 million on sales of roughly US$22 million.

"We continue to improve the health of our balance sheet," Conway said in a statement.

That will be welcome news to owners and fans of Shelby's vehicles, said Don Arnold, president of the 98-member Shelby Cobra Association of Texas.

"For years, we had events he participated in, and a question we wondered about as his health got worse was what would happen to Shelby American if Shelby passed away," Arnold said. "I'm optimistic. From what I've seen in management and where the company has gone, they haven't missed a beat."

Shelby American introduced new vehicles and products at the North American International Auto Show in December, and the company is also working on modifications to Ford's new EcoBoost family of engines: four-cylinder and V-6 motors that rely on turbochargers and efficient direct fuel injection to develop substantial horsepower.

"Shortly before Carroll passed, I visited him in the hospital and he said, 'John, keep Shelby American alive.' He gave us that charge," Luft said. "The spirit of Shelby continues to live within the walls of this place."

-- Dallas Morning News

Republished from the Winnipeg Free Press print edition March 22, 2013 F10

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