By Ilona French
Ask most engine builders and they’ll tell you: It may be highly rewarding, but this business is no walk in the park…. “Everybody’s excited about being an engine builder, but it’s probably the hardest job in the world,” said Bill Schlieper from Sullivan, Wisconsin-based Pro Power Racing. “You’ve got to do a lot of your research and development—and spend a lot of your time—just because you’re passionate about doing that. If you charge the customer for every hour you put in at the shop, they couldn’t afford to come back.”
In addition to putting in 12 or 15 hours on some workdays, countless factors have to go right in order to get the job done. “You have to rely on so many manufacturers giving you quality parts, and you have to rely on every one of your pulleys and everything that you create and dyno,” Schlieper continued. “Once all that’s run, you still have to require and check so many things that when it’s installed in the race car racers don’t do it wrong—they don’t get bad fuel…have the wrong oil lines, the wrong oil systems. For all those little things, you have to have a full-service area that you create the environment where this person has the least amount of chance of doing something wrong because racers are just like anybody. It’s Murphy’s Law; you’re going to do it wrong first before you learn. You can’t afford to learn from your mistakes anymore in racing. You have to do it right the first time.”
Growing Your Customer Base
Even after you’ve virtually eliminated racer error and orchestrated flawless, winning engines in unpredictable performance environments, still, other obstacles can tangle the line to success. “The biggest thing is the economy going on its ear,” said Ron Hutter from Hutter Racing Engines, Chardon, Ohio. “People just aren’t spending as much and some people don’t have any money to spend…. The cost of racing is going up and…people are more cautious.”
In order to keep his business running strong, Hutter has diversified and broadened his business base, rather than tackle one niche market as he did in the past. “If you had told me five years ago that we’d be working on BMWs instead of all American stuff, I would have poo-pooed that,” he said. “I wouldn’t have thought that that was going to happen; but here we are, working on a team that runs three BMWs in a road racing series.”
Tom Hemphill from Clarksburg, Pennsylvania-based Hemphill Racing Engines admits that in order to pull in customers, his company has taken on a few jobs lately that they may have otherwise passed on. “We really don’t turn anything away unless it’s just got ‘trouble’ written all over it,” he said. These less-than-ideal projects have included a small amount of stock repair type work, resurfacing heads, and pressure testing for local garages. “We’re repairing a head for a guy’s drag bike, which, we never really worked on motors…. I don’t know that it’s all bad; it may open up some different avenues for us.”
Hutter has worked on some high-end street motors and Corvette, Chevelle, and Oldsmobile 442 restoration projects, which the company might not have previously welcomed. Of course, working on different types of projects can create uninvited obstacles, including problems with tracking parts, making sure everything gets charged out and ordered properly. “It was easy when you were doing just one thing,” said Hutter. “Now if you miss a part, you just don’t get paid for it. So you’ve got to pay more attention to everything that’s going on.”
Vic Hill from Vic Hill Racing Engines, Mosheim, Tennessee, has been in business for 13 years, and in recent years his customer base has actually grown and business has blossomed, despite what many call a terrible economy. “I race myself, which promotes our product, and I understand what the customers need because I race, and I think that’s one of our advantages to people wanting to buy engines from us.”
While Hill certainly does enjoy racing, he also tenaciously uses the sport as an advertising tool. “We run World of Outlaws races, Lucas Oil races, Southern All Star races, Ultimate races,” he said. “If it’s within a couple hundred miles of us here in East Tennessee, which there’s a ton of tracks that are, I just go and hit those races. Last year I set track records at two different tracks and we had a really good year racing, so that’s great for advertising. When you win the race, people want to have whatever’s winning.”
It’s not hard for Hill to find racers eager to learn more about his products. “They come to us,” he said. “I see some engine businesses that really go after the racer and, I’ve heard it from more than just me, they’re called ambulance chasers. If someone has trouble, they’re right there. We don’t do that. We have a product and we race, and if someone comes to me at the track and wants me to help—and I’ve done this before where somebody had trouble and just came over and said, ‘Hey, will you come and look at my engine?’—then sure. Because I was there, hands on, instead of just advertising in a book, we got their business.”
Hill attributes his success to being on call and available to racers at virtually any moment. “It is harder to do it that way,” he said. “For instance, I’m leaving in the morning to fly to California. I’ve got a new customer that’s running the Lucas Oil off-road trucks. He talked to me for two or three months and he had had a few different engine builders and they’d sell him something and he’d tear it up, whether it was self-inflicted or the engine builder, whatever it was. He sent everything he owned out here and we’re building three engines for him. The first one we delivered, it’s there and I’m going to fly out, start it, go through all the procedures just to help the guy not tear his engine up. I think a lot of people don’t want to take the time or spend the money that way…. I think [customers] really want someone that genuinely will get out and bust their butt and help them do what they want to do.”
Start Small & Become Grand
In an economical climate where mounting debt seems like the norm, Hemphill has taken a different route, using a debt-free strategy to keep his business profitable. “We always did try to be somewhat conservative in our approach to business,” said Hemphill, who has positioned his business into the safe zone by paying off his building and equipment. It didn’t happen overnight, but rather, over time.
Slow and steady can win the race for engine building success. For example, even though a lot of people knew about Hill from his 10-year Cup driving background, it still did take time to build up business. Instead of overspending on equipment and employee paychecks, Hill limited purchases to the equipment he truly needed. In his case, that was cylinder head equipment.
“I had one person and myself, and we started building engines locally and then we got a little bigger, a little bigger, and I got another guy and bought more equipment,” said Hill. “As we were making money, I purchased equipment. I didn’t lease it. I paid for it. So until I had the money to buy the equipment, I would not make as much money because I’d have to go somewhere else and use their equipment or have some other people do the job. But I still made money and I just kept my overhead small enough to where as the business grew, we grew with it—with people, equipment.” Now the company is essentially self-sufficient. Hill doesn’t have a big equipment payment, which absolutely helps boost the bottom line.
Coping with Rule Changes
“The biggest thing fighting all of us right now is the fact that the sanctioning bodies and track promoters want to ‘save the racers money,’” said Schlieper. “They tend to change the rules, making our parts either worthless or illegal, and our customers’ assets are considered illegal. So you have a transition from a customer that has engines that he truly likes or are his favorites and he wants to be able to race them for a reasonable amount of time. We freshen engines anywhere from three to 10 times, and the parts and quality obviously that you buy, you can have an engine that lasts for a long time. But if you change the rules in the midst of a driver’s engine being still serviceable, you render that engine worthless.”
It’s no secret that the top racing classes are expensive; yet many people think everybody should be able to race at the top division. “Some guys can’t afford it; they just can’t do it,” Schlieper said. “And then you have those parts that the top racer uses; he can’t sell it to anybody because they’ve made his engines worthless in our classes. So there’s a lot to be said for a guy that does it for a living that can’t sell his used engine. If a driver can’t sell his used engine, it’s hard to get him to buy a new one no matter what kind it is. If it’s 100 horsepower better or more durable or whatever, he has to somehow have money to spend on the next one.”
Schlieper emphasized that the biggest structural problem is there are no common rules for the top racers and amateur racers. “They have so many different rules, whether it’s a spec or crate or something in the middle.” Schlieper believes that to combat this struggle, engine builders, racers and the like need to get together and help advise tracks and sanctioning bodies on creating incentives to keep engines legal and/or usable at their facilities. This would help racers stay in the sport and not have to find a new venue or new place to sell parts and engines, which in turn would help streamline the business of engine building.
“We can work together as a group,” he said. “It’s very important to keep the rules of common sense as part of who creates the rule system.” Working together, with common sense, can help the industry get one step closer to accomplishing common ground.