A new car company supported by Robert Lutz plans to sell American supercars produced largely by suppliers.
Lutz, the 68-year-old chairman of battery maker Exide Corp., says he is an 'investor, adviser and coach' to Cunningham Motor Co. Lutz joined Exide in December 1999 following his retirement as vice chairman of the former Chrysler Corp. He is also a former head of Ford of Europe.
Lutz, his partner Briggs Cunningham III, and Credit Suisse First Boston, a Wall Street investment house, have raised $1.5 million. The money will be used to develop a grand touring car with a V-12 engine that would be capable of 320 kph.
The vehicle, meant as a rival to Ferrari and Aston Martin, probably would sell for more than $200,000.
The company says it plans to have a prototype ready by the middle of next year. Production could begin in three years and eventually total 500 units annually.
'There is sufficient wealth in the world to support an American supercar,' Lutz says. 'But so far America has been absent from the extreme high end of the market.'
The future of Cunningham Motor Co. depends on Lutz's ability to attract investors, because the project needs to raise as much as $100 million on Wall Street. There already is a promotional video with footage of Lutz in his jet and viewing a clay model of the car.
The project also needs strong relationships with suppliers, a supply of off-the-shelf components, a chassis and an engine.
Briggs Cunningham III, chairman of the new company, is the son of Briggs Cunningham Jr., a wealthy sportsman and creator of the Cunningham C-1. The senior Cunningham raced the car at LeMans during the early 1950s.
Creating a new car company is full of risks - just ask former General Motors executive John DeLorean, or entrepreneur Malcolm Bricklin. So Lutz and Cunningham have a business model that tries to avoid the massive cost of replicating a modern automaker.
'You don't have do what DeLorean and Bricklin and Tucker did to get into the auto business - raising lots of money and building plants and expensive engineering operations,' Lutz says. 'Now you just call a Visteon or a Delphi and a design house.'
The business plan is leaner than the Viper program Lutz oversaw at Chrysler during the 1990s. The cost of that program, including its V-10 engine development, engineering, tooling and launch, was about $60 million, Lutz says. The Viper development team used Chrysler parts when possible.
This time Lutz wants a lower-cost business model that is a virtual car company. He would outsource the engineering, manufacturing and assembly to suppliers. That would leave design and marketing to Cunningham Motor Co., which could have as few as 20 employees in an office near Detroit.
There are no plans to ask for US government money, says Walter Borda, a lawyer in Livonia, Michigan. Borda is corporate secretary and a member of the Cunningham board.
Although Lutz is an important part of the concept, planning and fund raising, he will not be an officer of the company. Lutz says he envisioned the project after leaving Chrysler in 1998 but his role was limited by his contract's no-compete clause. Chrysler was being acquired by Daimler-Benz, which was preparing its own supercar, the Maybach.
Other project participants also have automotive experience, says Borda, who is a former attorney at Ford Motor Co.
The CEO is John McCormack, retired president of Asha Corp., a Santa Barbara, California, company that develops automotive technologies, including the Gerodisc used in some traction-control systems. McCormack also worked for a couple of automotive importers in their formative years.
Briggs Cunningham III is already involved in a separate US car-building effort, Cunningham Historic Motor Cars of Lime Rock, Connecticut. That project produces hand-built cars similar to the original Cunninghams of the 1950s, which cost $180,000 each. This year's production: three.
The new company has retained Stewart Reed Design Inc. of Holland, Michigan, and wants to have a driveable prototype by the middle of next year.