Kalkhoven and Forsythe buy Cosworth from Ford
by Mark Cipolloni
November 15, 2004
AutoRacing1.com
In what can only be described as the deal-of-the-decade, Champ Car owners
Kevin Kalkhoven and Gerald Forsythe have acquired Cosworth from the Ford
Motor Company. Today in London, England Kevin Kalkhoven, along with
Cosworth Managing Director Tim Routsis, made the announcement to over 500
employees at a Rugby Club stadium in Northamptonshire, England, near
Cosworth's headquarters.
The sale includes all aspects of Cosworth that Ford owned, including the
headquarters in Northampton, England (north of London) and the plant in
Torrance, California that looks after the Champ Car and IRL engine programs.
Kalkhoven and his Champ Car series partner Gerald Forsythe are 50/50 owners
of Cosworth that will see Forsythe have an equal financial position in the
company but Kalkhoven having more of the oversight role.
So far-reaching is Cosworth’s motorsports business, that Kalkhoven and
Forsythe have moved from being owners of Champ Car (along with Paul
Gentilozzi) to becoming two of the most influential men in motorsports.
Cosworth, who has a reputation for being one of the premier racing engine
manufacturers in the world, has a history that dates back to the 1960’s when
they powered the late great Jimmy Clark to so many Formula One victories in
a Colin Chapman Lotus.
Not only does this deal secure the future supply of engines for their
Bridgestone presents the Champ Car World Series, powered by Ford, it
guarantees that the Red Bull (formerly Jaguar), and Minardi F1 teams have
engines to use in 2005.
Kalkhoven has also given guarantees that Cosworth will continue to supply
engines to Chevrolet for their IRL program despite the fact that the IRL and
Champ Car are bitter rivals.
There were many offers made for Cosworth, over 60, but it was clear that the
Forsythe/Kalkhoven offer was superior.
"We had many offers for Cosworth," Routsis told AutoRacing1.com, "but it was
clear that the Forsythe/Kalkhoven team had the best deal for Cosworth, it's
employees, and for Ford. Dealing with Kevin Kalkhoven and his staff was a
pleasure. Many of the teams submitting proposals were racing folks.
However, it was clear his team were professional businessmen, and at the end
of the day, Cosworth must be run like a business. A business can only be
successful if it's profitable and it's clear Kevin and his team know how to
do that."
As many people are beginning to find out in motorsports, Kevin Kalkhoven is
a man of his word, and all the people we have talked to say he's like a
breath of fresh air in the industry.
"I first sat down with Kevin about a month ago and we wrote down the plan
outline on a single piece of paper," said Routsis. "It's amazing that after
many days of intense negotiations the final contract came out just like we
summarized it that day. It's a testament to the integrity of a man like
Kevin. It was clear his team knew why they wanted to buy Cosworth and their
plans for the future of the company were best for Cosworth, its employees
and Ford.
With Cosworth now cutting it's umbilical cord from Ford, they are free and
independent to do business with any car manufacturer in the world.
Not only will Cosworth continue to make some of the best racing engines in
the world, Kalkhoven has big plans for Cosworth to make after-market car
parts for any number of cars worldwide. Particularly interesting to him is
the "tuner" car market, which is a craze in Europe, Asia and North America.
"We have no plans to change the name of Cosworth," Kalkhoven told
AutoRacing1.com in London. "We are pretty much happy with the management
team, headed by Tim Routsis of Cosworth, and that will stay largely in
place."
Kalkhoven bought JDS Uniphase for $11 million with his partner Dan Petitt,
and grew it into a billion dollar business.
"When we signed that deal," Kalkhoven told AutoRacing1.com, "Dan and I were
completely out of money. We had nothing left, but we took a gamble, grew
the business, and several years later we sold it for almost $1 billion."
Kalkhoven and company have made a career out of taking pieces of businesses
from large corporations and building them into profitable entities.
"I have made a career out of buying pieces of companies and growing them
into successful businesses. Cosworth is no different than JDS Uniphase in
that regard," said Kalkhoven. We see Cosworth as a company that has
tremendous potential and we intend to grow it into a hugely profitable
business."
Both Kalkhoven and Routsis see a big opportunity for Cosworth in the tuner
car market in the USA.
"We see the Torrance, California plant playing a big role in that," said
Routsis. It makes sense to make car parts as close to the location where
you are going to sell them, especially in the low-margin, high volume
business like that.
There are also plans for Cosworth to build race engines for the support
series of Champ Car as well.
"We are looking at building economical but powerful race engines for Champ
Car's support series as well," said Routsis. "We see the Torrance shop
servicing all those engines as well as our Champ Car and IRL programs.
Cosworth can build race engines for any racing series now. We have some of
the best engineers and manufacturing processes in the world and we no longer
have to do stuff just for Ford."
--
mvh/rg. Christian
I would have to ask the questioner. I haven't had a chance to ask
the questioners the question they've been questioning.
-- George W. Bush, Austin, Texas, Jan. 8, 2001
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