Keeping Shelby alive

Carroll Shelby, the wild-spirited 89-year-old racing icon and king of thundering garage hot rods, lay on his deathbed last May struggling to talk. He urged his younger friend and business partner John Luft to lean closer.

"Keep Shelby American alive," Shelby strained to tell Luft in his final hours.

"I know that sounds a little melodramatic," Luft says today, recalling the moment. "And actually, I think what he said was, 'Goddamn it, keep Shelby American alive.' If you worked for Carroll, you know what it's like to have the old man's boot on your backside.

"So that's exactly what we're doing here now--we're going to keep Shelby alive," says Luft, who for three years has been the rarely seen president of the independent Las Vegas tuner company, sports car manufacturer and performance parts distributor.

In the next few months, Shelby plans to pull back the curtain on new post-Carroll products. Luft says the company will unveil new product plans in January at the Detroit auto show, in February at the Chicago auto show and in March at the New York auto show.

Expanding parts sales is a key new focus for the company, the operating unit of Carroll Shelby International. Luft forecasts that parts sales will grow from about one-fifth of revenues today to about half of revenues in two years.

Shelby American President John Luft says the company will start unveiling new product plans in January.

Luft also vows that Shelby will be part of Ford's fast-growing EcoBoost powertrain technology, which puts more power into smaller engines and raises Ford's fuel economy performance. But he declines to discuss details.

"In the past, Carroll was the guy in the limelight and we stayed in the shadows. Now it's on us. We're now the face of Shelby American. But we've got his playbook, and it's a really good one. We're going to make things keep happening here for another 50 years."

That may come as a relief to a lot of interested parties--including Ford Motor Co.

Thanks to a loosey-goosey relationship between the two companies that stretches back 50 years, the Shelby name has been the sparky flint that transformed the Mustang from a fun little secretary's car into the object of maniacal aspiration among American consumers. Mustangs were good. Shelby Mustangs were better. And high-end Shelby Mustangs--such as the 2013 Shelby GT500 Super Snake, with 850 hp blasting like cannon fire--seem to render ordinary car enthusiasts into fire-breathing fanatics.

In this arrangement, Shelby always made a few bucks and Ford Motor Co. appeared on the front covers of performance and car-lover magazines, bolstering the street cred of showroom products at Ford dealerships across the country.

This is the magic of the Shelby brand name. And it's why hearts skipped a beat in May when the salty-talking Texas tinkerer died.

The company’s Las Vegas Speed Shop garage helps Shelby American achieve its reputation for speed and power.

"I hope they're going to continue coming out with new cars," says Randy Anderson, owner of Anderson Ford in Clinton, Ill. "It's an important piece of what we do here. But we've gotten no indication from Ford."

Anderson, much like about 2,300 other Ford dealers, uses an authorized Shelby Performance Center to help promote his store. Shelby models are marketed there, as are vehicles from Shelby's primary competitor, Roush Performance, as well as Ford's SVT performance vehicles. Behind all that is the sale of performance parts, such as Shelby suspension tuning components, engine enhancements and gear shifters, and the certified technicians who do the upgrades.

A Shelby car simply sitting on a dealer's property generates showroom traffic, Anderson says. Along with the Ford F-150 pickup, Shelby cars give dealers some of the Ford brand's highest-margin transactions. A typical Shelby conversion is a $15,000 order.

"They're some of the most desirable cars ever built," Anderson says. "Carroll was an inspiration, and if you're an enthusiast or a collector, you knew who the man was. So I'm just not sure what's going to happen now."

Jim Farley, Ford's group vice president of global marketing, sales and service, has issued a statement assuring the public that Shelby "will continue to influence Ford performance cars for many years to come." But beyond that, Ford has no official comment on what may or may not be coming from the Carroll Shelby-less Shelby American.

"It falls under the heading of 'future product,' and we just can't talk about our future product plans," says Jim Owens, Ford's marketing manager for the Mustang who spent four years working at Shelby American.

"But what I can tell you is that we all get it. All of us here spent time with Carroll and learned what he was trying to say about performance. It's built into our cars. What Carroll Shelby was all about is going to continue to influence our cars for a long time."

Dealers are ordering the 2014 Shelby GT500, he says. But he declines to talk about 2015. The Mustang is scheduled for a platform redesign in 2015.

"Shelby is our halo brand," Owens says.

The 2013 Shelby GTS can retail for about $35,000 and targets fans who can’t afford the line’s more normal $48,000 to $100,000 prices.

It's a question John Luft has been getting all year.

"People keep asking me, 'Are you guys still in business? Are you going to fold it up now?'

"But see this?" Luft asks, pulling an Apple iPhone 5 from the pocket of his suit coat. "I'm pretty sure you can go buy one of these if you want to. And guess what? Steven Jobs is dead.

"Apple will continue without Steve Jobs. Ferrari survived without Enzo Ferrari. We will still be Shelby American without Carroll Shelby."

He says the company is profitable, but it wasn't when he stepped in as president in 2009. That year, Shelby International lost $3.6 million on revenues of $33 million. This year, the company expects earnings before interest, tax and depreciation of $2.5 million on sales of about $22 million.

Luft doesn't try to replicate the company founder's look and attitude. Shelby was prone to dressing like a wealthy cowboy poker player, with black clothes, boots and cowboy hat. In contrast, Luft is the only Shelby manager in sight among 110 employees in five buildings on the edge of the Las Vegas Motor Speedway who is wearing a business suit, sans necktie. Tall and sandy-haired at 56, he wears rimless spectacles that make him look like someone sent down from the legal department to straighten things out.

But looks are deceiving. Like many Shelby managers, Luft has been a speedster and an automotive groupie since his teen years. He joined the company 12 years ago after working in corporate jobs at Disney and Hilton. Shelby hired him to make order out of the company founder's personal affairs.

Over the decades, Shelby had allowed his name to be used--sometimes ill-advisedly--to promote products such as deodorant and chili flavoring. Perpetually moving and wheeling and dealing, operating on handshakes and verbal OKs, Shelby had created a trail of some 300 licensing deals.

"Shelby is a brand name, and you have to treat it like a brand name," Luft advised him in 2000 while president of licensing operations.

"Goddamn it, I'm not a brand," Shelby would protest. "It's just me. I'm just doing what interests me."

But in the end, Shelby agreed with Luft--and the fine point has a direct bearing on what happens next. Shelby came up with eye-catching car ideas such as the Shelby Cobra, Chrysler's Dodge Viper and the Series 1 roadster, designed by Shelby and crafted using an Oldsmobile engine and a Chevy Camaro gauge cluster. But Carroll Shelby the man could only live so long. Carroll Shelby the brand might live as long as there is interest in what the name represents--speed and power.

The company recently introduced the Shelby GTS, which it calls an "entry-level Shelby" for fans who can't afford the line's more normal $48,000 to $100,000 prices. A GTS, featuring a supercharged V6, retails for about $35,000.

Internally, the GTS is referred to as "the parts car" because to sell at that price, it comes with fewer Shelby-brand components. The idea is that as Shelby's owner body ages, a younger consumer can buy a GTS and spend years lovingly buying more add-on Shelby parts for it.

2013 Shelby GT500 Super Snake.

Lest anyone think that smaller engines, lower prices and fuel economy sum up the new order of business at Shelby, the company surprised onlookers in August with the first product offering since the founder's death--the 850-hp version of the GT500 Cobra. And just for good measure, the catalog now includes a 1,000-hp version of the car, representing a total package delivery cost of about $200,000 once Shelby's technicians enhance the Mustang body with special subframe parts to keep it stable as it reaches speeds of up to 200 mph. Carroll Shelby had once suggested a 1,000-hp car--Luft's team created it.

"Sometimes 850 horsepower just isn't enough," says Gary Davis, Shelby's vice president of production and r&d.

Davis, a one-time John Deere tractor dealer in Nebraska, sold his dealership and moved to Las Vegas in the 1990s to be closer to West Coast drag racing and Carroll Shelby. Spending his days hanging around the garage like so many other tourists who come and go through the facility eventually got Davis hired. The company tends to hire and promote managers from outside the auto industry--like Luft himself.

Roger Sorel, vice president of sales, came from a career in field operations at Burger King. Jer Gervasi, vice president of Shelby's parts operations, had worked for the national musical instrument retailer Guitar Center in New York. Gary Patterson, vice president of operations--and a company test driver with the ability to carry on technical conversations while accelerating to 110 mph on deserted Las Vegas surface streets--came from T.J. Maxx.

All were Shelby fans, if not Shelby owners, and each wanted to be closer to the Shelby factory.

Inside the Las Vegas Speed Shop garage, Davis has a wicked grin as one of his Shelby 1000s is hooked up to a dynamometer for a demonstration. The engine erupts like a Navy fighter jet.

"It's actually 1,100 horsepower, but we don't advertise that," Davis admits when the exploding roar dies down.

"Carroll loved doing this, and so do we. That's why we're all here."

Luft, a large shareholder in the company, is positioning it to move forward in three directions--product development, performance parts and Speed Shop tuning.

The parts business is the most immediate center of attention. The company is overhauling its distribution and retail operations to make it easier for dealers and consumers to order parts. The company has just gone live with a dealer-only portal on its Web site to let retailers into the system to price parts. Now, a dealer can sit with a showroom customer and discuss equipment upgrades while navigating Shelby's online catalog for options, and place and track orders.

Shelby also has just launched a retail initiative to visit and recruit more dealers around the country. About 1,000 of Ford's dealerships are not Shelby dealers.

"We can't live and die by automaking," Luft says. "But there are a lot of opportunities for us. Only a few thousand people a year will buy a Shelby car. But there are hundreds of thousands of people out there who would like to own one--or at least part of one."

More parts sales: Shelby American is making it easier for dealers and consumers to order Shelby-brand components such as a new wide-body kit that allows Cobra owners to install 14-inch wide tires.

Keep the cars coming: Shelby says it will begin displaying new products in January.

Expand the owner base: The Shelby GTS brings down the entry price of a Cobra to around $35,000 in an effort to attract new buyers.

Dealer outreach: Shelby will try to improve communications with its 2,300 U.S. dealers and hopes to recruit more.

Embrace EcoBoost: The company expects to link its brand with Ford's popular fuel-efficient EcoBoost powertrain offerings.

By Lindsay Chappell- Automotive News