2 Sides of the AC Story

[brentfenimore]

Hello to all,

I am posting the attached memo in order to give the AC side of the story on their relationship with Jimmy Price.

I can comfortably say that we (SAI) did not undermine the relationship between the two parties and that Carroll only came into the picture in order to restore an old relationship with a friendly company that needed help.

I do not agree with several of the posts on the general forum concerning the Shelby AC Cobra but do not wish to create a war or hurt any of the parties involved, Price, AC or Shelby.

R Brent Fenimore



Cobra Club Readers.

February 13, 2004

As an introduction, my name is Mike Hall and I am a shareholder of AC Motor Holdings Limited. I am therefore also a partner of Alan Lubinsky.

I have a number of friends who have Cobra’s and who have read the posts on the site, and while I have not read any posts first hand, I understand that there has recently been a number of recent posts about the AC/Jimmy Price situation. I also understand that there are a couple of members who have been pretty personal about Alan Lubinsky.

Just for the record, I have had telephone conversations with your member operating under the MK1V name and I fully backed the decision not to pursue any commercial relationship with him whereby he would represent the AC brand in the USA. From memory, this was about 4 or five years ago.

I have been a partner of AC since the back end of 1997. It has never been my full time occupation. I will also say that there were times a few years back that I clashed with Alan personally over some issues, but I must be very clear that I have always respected his commercial decisions. The business that we are involved in is an extremely difficult business and it is not for the faint hearted, as if it was, there would be many more people that would take the risks that this sector entails. However, a number of people present themselves as being an expert, but in my experience, they have not got a clue on how difficult this business is.

I am also not prepared to make this personal, as I understand that some of the posts are, only to give everybody a frank account of our relationship with Jimmy. Prior to the current situation, we had an excellent relationship and have always respected what and who he is. AC did have a commercial relationship with Jimmy on the Ace that we inherited, and that program was not viable to both Jimmy and AC. During 2001, AC was having a difficult time as the extremely high costs in the UK made it very difficult to make something commercial. We wanted to increase volume and reduce cost and it was clear to us that the UK was not the place to do that in. We wanted to keep, if possible, a smaller operation in the UK for aluminum cars, but even that was in question. However, AC has an important British heritage and history, and we decided to try and accommodate this in another form.

We always had a relationship with Jimmy, and at the time, had even asked him to consider building composite Cobra’s that could be sold under the AC brand. We always believed that a $40,000 Cobra would be viable. We could never move forward on that as Jimmy was not happy to do that as it probably would have hurt his own product sales. Obviously, it was his decision, which he was entitled to.

He then approached us and said that he would like to operate our Frimley factory and build the aluminum cars under license. We were in favour of that and discussions were entered into. A number of issues were discussed that would make this viable, including the fact that he was making a lot of the components in South Africa anyway, and more so, we were more than happy to discuss that his dealers in the USA could sell the AC product. It was always made very clear that he would not acquire any of our assets, including jigs. He would have the use of them. He took over from August 1, 2002 and we were in discussions on a draft contract. The discussions also included that the lease on the facility be taken over. There was also some work in process.

Already in January 2003 we were finding out that there were financial problems at his company, Private Corporation Limited. (“PVT”). We then heard that the Superformance dealers had no intention of taking the cars. This had to be an extremely negative impact on the business of PVT and in addition, to AC, as the likelihood of income streams on Royalties became increasingly more worrying. We are also aware that a customer of AC advanced PVT a significant amount of money, which he understood to be guaranteed by Jimmy. This was denied when the customer went to have his funds returned after the factory was closed. We also were made aware by the landlord of the facility that they were struggling to get the lease taken over by PVT. We wrote a number of letters to PVT asking them to advise us how they intended moving forward, but those remain unanswered. It was also confirmed to us that no parts were being sent from South Africa for the production.

There were other desperate measures been taken at the factory. We were also hearing that there were discussions going on that could see some new people trying to get involved in selling in the USA. We made it very clear to PVT that this would not be acceptable unless there was a full business plan presented and approved by us. This was ignored. We decided that as we were now aware that many creditors were in arrears, including Payroll Taxes, we needed to try and move forward in another direction as many of the liabilities were still AC’s as PVT had not taken over the lease etc.

We are aware that there were numerous correspondences suggesting that AC was owned by Jimmy. While we do not really care what people say, we would not accept any harm to the AC brand. All the partners of AC have significant money invested in the AC brand and we will protect it as we see fit. Although there was a requirement for all marketing and advertising material to be cleared by us, this was also ignored and the quality and desperation of the advertising could be seen in adverts placed in Autoweek during September 2003.

Jimmy Price then approached Alan by telephone and asked (demanded) that he gets the AC brand to put on fiber glass cars to be built in South Africa. He confirmed that he had potential dealers in the USA that would give the factory a deposit for cars but they were not prepared to unless they got fiber glass cars in additional to the aluminum cars. Again, he was asked to provide a business plan, but this was refused in no uncertain terms.

It was then decided by AC that we would look at other opportunities as clearly, the situation with PVT was perilous.

Since then, there have been certain announcements about a relationship formed with Carroll Shelby. We are exceptionally proud to be involved in this as this is the best thing possible for the two brands.

As mentioned before, the partners of AC have invested significant funds in the AC brand, and the same goes for Shelby. It seems that a number of parties feel that they can hijack as they have been making imitations and as such have operated off the back of these two brands and are somehow getting confused and feel that it is theirs.

It is also strange that Jimmy only wanted to have an AC brand on a glass car when Shelby announced the 4000 series.

To finish this story, it is true that Jimmy was very upset when he heard that AC had done a deal with Shelby. To try and upset the issue, he did go to London and fire everybody. He decided to put himself first, and not worry about people who had jobs. However, these bulling tactics did not work as despite how anybody feels about AC or indeed Alan, I was very thankful that Alan had protected AC which meant, like the other shareholders in AC, my investment is still safe.

PVT went bankrupt in October 2003. Under the management of Mr Price, it had completed three cars in fourteen months, all of which had been in progress when he took over. It is public record that it was about six months in arrears with Payroll Taxes when it was shutdown. I know that it has been suggested that it was closed because of the deal with Shelby, but the facts are different. The financial records also suggest otherwise.

These are the only comments that we are going to make. I have said that nothing is personal. We wish Jimmy well.

From our part, we look forward to announcing further news in the next few weeks, despite what some of your posts suggest.

We also look extremely forward to a long relationship with the Shelby organization, and indeed Carroll himself, as for the first time ever, the “Real Thing” will be available over a spectrum of product.

Sincerely yours,

Mike Hall.

[A Snake]

Interesting what idle speculation generates. Vis a vis the afore mentioned posts.

Frankly Brent, if I were you and Mike, I'd let the proof of the pudding be in the eating. Let the speculative gossip fly....it's going to anyway.

I find in business, the less said the better and when it is said, it is cast in stone and irrefutable.

To me, your only concern is customers who have current business relationships established via orders/deposits. Let the rest stew.

While PR and marketing are certainly important, also as they say, talk is cheap. When the combined efforts of Shelby and AC begin producing product, the world (and some members of this forum) will all be lining up to place orders. All that went before will be forgotten and become part of history.

All of the best to both companies in this venture.

Al

[Excaliber]

I really appreciate Mike Halls post, THANK YOU.

I think the issues at stake here had gone of for so long it needed to be addressed, we needed to see the other side.

Many of us are very happy indeed to see these two great partners back in business, C.S. and AC. I wish you success in your endeavors!

Ernie

[SPEEDEAMON]

Kudos to Brent and Mr. Hall. As an outsider I am swayed from one opinion to the next on this forum but it is always refreshing to hear from someone within, directly involved in the relationship. And who better than AC, Carroll Shelby, and Ford to again form a partnership. What most may fear as a threat is actually not, but rather a continuance of the lagacy and with it the future brings joy for everyone whether they own an original, a replica or a kit. The car is already a work of art and imitation is the sincerest form of flattery. We will all benefit from this as future generations will eventually recognize the timelesss beauty of the Cobra. I have heard CS more than once start out his speach by being happy to be on "top of the grass". No matter how many or how accurate or how great someone can make a replica, a car made by Shelby is going to be a legend. His rival Enzo Ferrari is the only other true automotive legend who's cars are still exceptional after he's been gone all these years. Let's hope the new alliance is continued for a long time after CS is gone.

Shin

[Tom Kirkham]

Originally posted by SPEEDEAMON

His rival Enzo Ferrari is the only other true automotive legend who's cars are still exceptional after he's been gone all these years.
[/b]

I would put Soichiro Honda in that list.

[terry lee]

Brent,
This apperars to be just some more "lip flapping with no merrit" and nothing that we haven't seen before.
SHOW US SOME AUTOMOBILES!!!!!!!!!!!!!!
Then MAYBE you make believers out of us.
TL

[Excaliber]

Rude terry lee, VERY rude.

Ernie

[AC Cobra]

Brent, thanks for posting Mike Hall's communique about this ever developing story of AC, Jimmy Price, and Carroll Shelby. All three entites are important players in this business of building authentic Cobras or replicas of them. I for one appreciate you sharing AC's side of the story.

Many of us use Club Cobra as a source of information to stay abreast of news about what is happening in this industry and who the players are. In my case, its learning more of the history of AC and Carroll Shelby. And of course current developments.

Thank you.

[Jamo]

terry lee

This IS the Shelby American forum. If you wish to provide your opinion as an SPF owner, please do so at SPF's site or on the more public forums...

There has been some good discussion of late by both our British visitors in All Cobra Talk as well as the forwarded remarks here from Mr. Hall...certainly better discussion than those who merely speculate or have some other agenda.

Sarcasm in a mfg-specific forum is NOT going to be tolerated. You've been around long enough to know that.

BTW, I saw a line of several CAV cars in Vegas.

[Trevor Legate]

May I dive in and say thanks to Brent Fennimore for forwarding Mike Hall's comments.
I had the pleasure of many conversations with Mr.Hall circa 1997 and had high hopes for the company if he had been driving a desk at AC - sadly it proved not to be, for reasons alluded to within the statement.
As someone with an interest in this matter, in order that I will be able to get my facts right in my next Cobra book, I am delighted that such a clear statement has been made and pleased it came from Mike. If only more people/companies were so honest and forthcoming, life would be so much simpler (CAV etc). It can only reflect well on the company concerned.

It had been my intention to refrain from commenting about the manufacturing issue, even when I read comments I know to be somewhat 'optimistic', shall we say.
As one of the recent UK contributors to this site, I admit I would be more than delighted to see AC resurect itself, if that was possible. My only regret is that this link was not forged at least fifteen years ago, a great opportunity lost.

[Mark IV]

As this is the Shelby-American forum I will limit my reply directly to the statement by Mr. Mike Hall. This is in no way to question nor comment on statements Mr. Fenimore has made. As I have said before I do not know Mr. Fennimore an therefor I give the courtesy I would extend to anyone else: You are considered a gentleman until you prove otherwise and Brent has not done anything to me to consider otherwise. The same statement applies to Mr. Hall.

I catagorically will state that neither myself, nor my partner in AC Cars North America LLC have EVER spoken with Mr. Hall.

We were aware of his ownership interest in the AC operation early on, at that time (1999) Mr. Hall was, I understand running Coca-Cola Japan according to Alan Lubinsky. In 2000 Mr. Hall was announced as "Co-Chairman" of AC.

Numerous times we phoned and asked to speak to Mr. Hall but we were never connected. Several e-mails addressed jointly to Mr. Hall and Mr. Lubinsky went un-answered and faxes addressed to Mr. Hall went unreturned. Our hope at the time was to engage Mr. Hall in a dialog to attempt to put our agreements and understandings back on track as we were having communications difficulties with Mr. Lubinsky.

I cannot speak to his comments about the relationship of AC to Private Corp Ltd. although they differ with information I have and documents that I have copies of. I would assume that any further revalations regarding that relationship may only be revealed via the legal system. I was not a party to those agreements and was only an "informed bystander" if there is such a thing.

I understand that Mr. Hall's posistion is that it was "not commercially benefical" to AC to continue a business relationship with my company, that is their right. The issues I have and have commented upon was the way this relationship was handled and eventually, terminated.

Richard C. Muck
Co-Managing Director
AC Cars North America LLC (corporation since disolved)

Edited for spelling (only 1 "N" in Fenimore!

[What'saCobra?]

Many attempts have been made to reforge the original links between AC and SA. All to no avail in the past because certain ancient and curmudgeonly parties tried but couldn't wrest singular control of the enterprise.

AC Cars, Ltd. were cut off as a supplier, rather summarily at that, because Shelby took FORD's offer of cash and willingly dropped the ball in play. Bailed is an apt word. FORD made it clearly known that it wanted nothing from Shel but Le Mans winning, which was bot and delivered, as it should be.

But, FORD didn't want the Cobra to get in the way of the Shelby Mustang line, which some at FORD hoped would florish. When it sort of petered out, as the cars gained corporate weight (and wait), FORD dropped that also. Never made mondy.

The Shelby 500's to me look like they were fed to death compared to the 350's

Actually, if FORD was listening, they could do worse than to build a new GT350, rather than waste their corporate marketing impressions on the GT40, which is bound to go nowhere.

Some feel that what made the original 1964 and 1/2 Mustang's image take-off was the availability of the 271 hp HiPo version with the 4 speed tranny.

When they came in to see it, they also bot the cheaper versions. Only the wimps bot the 6 cylinder auto version. Have you seen Billy Klintoon's car in the museum in Arkansas? 6 cyl auto, I kid you not!!!

But, a new and proper GT350 Mustang would require another deal with Shel', and they only have so much patience. When he is gone, watch this space for a new GT350 "memory car", with a serious 351 350HP, paddle shifter, etc. Give his kids some money and make donations to the heart fund...

Ask me for the details...scratch, scratch...
No kidding, this is really a good idea...

It is no secret out of school that Shelby fought tooth and nail to prevent the kit makers from surviving, fortunately to little avail. But a few were hurt by his machinations. Isn't copying the best sort of praise? I always thought so. There was and is, no copywritten shape or trademarks other than "Cobra".

And that Cobra word was bot by FORD from Shel', perhaps in 1966 or 1967. AC Cars. Ltd. had the use outside the USA or was it N. America? I forget.

You remember above that we detailed at lengh about AC Cars, Ltd. continuing to make some great Cobras for quite a few years after Shelby had been put out to pasture in Kenya?

Well, when Brian caused the MarkIV to come to life, there was another attempt, through FORD, to rebuild the SA distribution/support/something. Efforts were rebuffed summarily with serious lip and lectures about parentage.

FORD made it clear that there was no need for old Shel' anyway. He was foolin' around with Chrysler again. (Remember the Tiger's purchase by Chrysler?)

Brian went to town (actually Brooklands at Weybridge) and built lots and lots of them. Actual certified cars...not kits. Just exactly how many is not perfectly clear to me, but let's say over 400. Not bad for a little British cottage company?

Others here can explain how the US distribution operations we met with mixed success. But, no were left over...quite unlike the 427 Cobras at the end of 1967...sitting out on the ramp waiting for a home...

Anyway, this is not sour grapes, I was not an investor. I still love em all, and also have great respect for the kit guys who, as Peter Brock rebuked CS on the public stage one day said, "...kept the flame burning... without your help..."

Just consider this the ramblings of an old man that paid the full price of admission in the day, got the ride of my life in exchange, seriously warped my brains as a result, have strong views that might run counter to prevailing wisdon and haven't yet bot the T-shirt because I still have the one that came with one of the cars from the dealership.

------------------------------------------
Aside:
Lubinsky et al screwed themselves in the foot by only buying the listed assets of AC Cars, Ltd, rather than the entire company, including its liabilities and keeping the original name going. Several of us watched him think he was so swift, but he screwed himself and the workers out of the grandfather clauses of the British Type Certificates, German certificates and EU rights and lost the right to sell legal cars. FORD had every legal right to withdraw the Cobra name, because AC Cars, Ltd. was gone baby.

Lub et al could have bot excess lines insurance to cover any unknown liabilities, but he wouldn't listen to anyone...particularly any associated with the old factory...dumb move.

He turned AC Cars Group, Ltd. into a kit maker! Good grief!

Whle the factory lied regularly about what was happening on the financial side, we were all accessing the USA SEC 10K's very detailed financial and structural reports of Pride Automobile, a US public company, who was chosen to take the burden of buying the AC assets from the liquidator, Price Waterhouse, and the Bank. Pride was obliged by US law to be explicit about the results of operations of AC Cars Group, Ltd., and the results drove Price into its own form of receivership and drove us, your faithful readers in paroxisms of variously tears and laughter.

What still surprises me is that the SEC was not perfectly clear about the important fact that Lubinsky kept the AC name in some way all the way through all of this. Sort of like it is an unrecorded asset, of the most valuable sort. I would think the banks and other creditors, including the other stockholders, would see this and take action...but then, I am not a lawyer either...

[What'saCobra?]

Correction:"...drove Pride...into receivership..", not Price.

[Mark IV]

..Mr. Hall to contact me. After I have presented my side to him, I will agree to no further comments about him. As I stated, I have never talked, emailed nor had any sort of direct communication with Mr. Hall and I would welcome the chance to communicate with him. I promise it will be productive and without malice.

I can be reached via my email and I will return any sort of contact.

Respectfully,

Rick

[Mark IV]

............still stands. I welcome contact from either Mr. Hall or Mr. Fenimore or even Mr. Lubinsky to discuss this.

I continue to stand behind my previous statements.

Sincerely,

Rick

[What'saCobra?]

We can all well understand their reluctance to try these issues in this forum, particularly if the principals have old "liabilities" they don't want dug up and examined here, but one cannot understand their reluctance to contact you personally.

That silent failure speaks more volumes than any decent and well-intentioned initial posting. The public opinion of the most knowledgable and most likely buyers of these products is being established right here and now.

However, it has only been a few days, the people in charge are likely reluctant in the extreme to have anything put down other than in private contracts and there are (admittedly) sleeping policemen about, including in the road ahead.

Nevertheless, they should contact you and, if you will excuse the expression, suck puss and get things sorted, so they can get started selling to an audience that would like to buy.

Their market failures can be initiated here and today. It will not need hindsight to see this future.

The longer this stays open, the worse it will be and the more compromised their potential market will be...
---------------------------
It was the Good Lord Jesus Who said the Pharisees had sight, but could not see...

[Excaliber]

From a legal perspective it may well be in the interest of all to NOT discuss the matters outside of a legal context.

In this case, silence does not mean good or bad as I see it.

Ernie