San Diego Business Journal,
September 12, 2005.
A Custom Fit
BY BRAD GRAVES
Decide on a product. Make it in bulk. Wring out inefficiencies. Sell it as cheaply as you possibly can. That's one way to do business.
San Marcos resident Randy Clark, 58, has chosen a different path, one that involves many hours of manual labor. The process carries a high price tag, but customers gladly pay a premium for the results.
Clark soups up cars.
He specializes in giving tired but classic vehicles a make-over and,
while he's at it, state-of-the-art technology under the hood: things such
as collapsible steering columns, anti-lock brakes, cruise control and air
Forty-two full-time employees collaborate on the work at his Escondido business, Hot Rods & Custom Stuff.
Bob McAuliffe soups up cars too, though the business he runs, Xtreme Motor Sports LLC, approaches the task a little differently. Working out of an area auto dealership (Guy Hill Cadillac, Inc. in Pacific Beach) and employing mechanics in that dealer's service bays, McAuliffe converts late-model vehicles into machines that surpass the capabilities General Motors Corp. gave them when they left the factory.
Clark and McAuliffe cater to the enthusiast, a customer who may savor
engine performance the way other people appreciate fine wines. It's common
for Clark's custom creations to be in the six-figure range. McAuliffe said
his shop's most recent project added $19,000 worth of work to a late-model
Dan Pegg recalls how Clark took a 1939 Ford into his Escondido shop and, in eight months, turned it into a machine Clark calls a Rumblin' Rag.
"He did a wonderful job," Pegg said. "He kept to the price we agreed to, and let me participate to the extent I wanted."
Pegg, a La Jolla resident who formerly held executive positions with Qualcomm Inc., Leap Wireless International, Inc., and the San Diego Regional Economic Development Corp., said his family chose a model from the late '30s because it was different from the standard fare at car shows. "I wanted something that hadn't been overdone,"he said, referring to an earlier model Ford that seems to be almost everywhere.
Another attraction of the 1939 model is that it has a rumble seat (a back seat that folds out from the body). Pegg's model also has an open passenger compartment covered by a canvas, or rag, top-hence the name Rumblin' Rag.
Pegg won't say how much he spent on the '39 Ford, though he would say he struck a fixed-price deal, which Clark was able to honor.
Started in 1989, Hot Rods & Custom Stuff has grown to $3 million in gross sales during 2004. The company expects $3.5 million this year and may hit $4 million next year, said Patricia "Peaches" Clark, who is Randy Clark's wife and business partner. She handles finances for the business.
Peaches Clark said she deals with a variety of customers. Some are able
to write checks for $50,000; others make weekly payments.
On the other side of the ledger, Randy Clark said he pays for quality and the opportunity to do business in California. "My guys are craftsmen," said Clark. "Good help is out there. You just have to pay them." He estimates that he could do business at one-third the cost if he worked in another state.
Hot Rods & Custom Stuff gradually expanded from renting one building to owning four. With multiple cars from different eras-a '62 Corvette here, a '55 Chrysler there, a brand-new '32 Ford body replica leaning against the wall-the Escondido business seems like an automotive museum.
People in the market for a late-model vehicle with a little more heft are likely to visit McAuliffe in Pacific Beach.
One of Xtreme Motor Sports' capabilities is to take an Escalade, the sport utility vehicle produced by Cadillac, and add a package of hardware from a New York company called Dyno-Proven Products.
Once the SUV is in the service bay, it gets a supercharger, new exhaust system components, a new suspension and new brake components. The add-on hardware converts a 345-horsepower engine to a 500-horsepower engine, one that can take the vehicle from 0 to 60 mph in 6.6 seconds. Dyno-Proven says the modified Escalade has the stopping power of a BMW. Modified Escalades "defy all logic" with the way they perform, said McAuliffe.
That's not to say Xtreme Motor Sports concentrates solely on late-model Cadillacs, or that it limits itself to major overhauls. One recent commission: finding a unique grille for a Bentley.
The shop also does wheels, tires and electronics, on top of engine, exhaust
and transmission work. McAuliffe said some customers take a step-by-step
approach, making small modifications to their cars at regular intervals.
Then they get a new car and start all over again.
The Hill family and McAuliffe-a longtime employee of Guy Hill Cadillac-set up Xtreme Motor Sports as a sister business to the Cadillac dealership in 1999.
"We were talking about where the industry was going," McAuliffe recalled, "what we could do to help the business, how we could get more work for the shop. We came up with this idea." After a two-year probationary period, the owners decided to keep the business going. The owners of Xtreme Motor Sports chose not to disclose revenue.
Randy Clark and McAuliffe say an important part of their business is listening to their customers and interpreting what they want.
Pegg, the owner of the Rumblin' Rag, said he had several sessions with Randy Clark, each lasting hours. One was devoted to the dashboard, a custom design that combines retro gauges with a DVD player.
Looking ahead, the Clarks are waiting for another of their creations to hit the resale market. It's a 1949 Chevrolet that went into the Clarks' shop around 2000. In 16 months, the shop crew transformed the car from a business coupe to a low-riding, Corvette-powered hot rod. Adding to the car's pedigree: It won the Don Ridler award, a high honor in car circles, in 2001.
The Barrett-Jackson Auction Co. of Scottsdale, Ariz., puts the car on the block in January. The Clarks will be watching the bids with interest. "I have no idea what the car will bring at auction," said Randy Clark. "I hope a lot."
A person can't blame them if they watch other headlines with interest, too. Gasoline prices on their way to uncertain highs, and other economic uncertainties, make it tough to tell how the car-customizing business will play out during the next couple of years.
The Clarks say they're prepared. After all, said Peaches Clark, the business started during a recession. Randy Clark notes potential customers are as close as Del Mar and Rancho Santa Fe. If the economy goes south, these people will still have an appetite for luxury items. "People who have money," he said, "are always going to have money."