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Document: |
North American Program of Racing
and Related Activities for the Model Years 1968-1970. |
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Source: |
Ford Motor Company |
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Date: |
July 12, 1967 |
These pages are from a 94-page presentation. They
teach us that the Shelby Program
was not a money-making venture the way it was being run.
When analyzed alongside the DSO database and
December 8, 1967 letter from A.O. Smith to Ford Motor Company,
this document becomes a key component in answering the question of "why
only a single convertible was built." Shelby's plan to offer six
different models in 1967 was devastated by the 'launch problems' and
reduced ability to produce cars. The operation hemorrhaged money up
until Ford made the decision to terminate the program in May 1967.
In larger type for older eyes:
In 1965, Shelby American incurred an
operating loss of $311,000, primarily because of launching difficulties
which resulted in reduced production levels. These losses were offset in
1966 by operating profits of $310,000. A profit guarantee payments of
$101,000 was made in 1966 ($50,000 per year as provided in the profit
guarantee agreement with Shelby American).
Preliminary indications are that
Shelby American will sustain an operating loss of $764,000 in 1967.
Losses again resulted from launching problems and associated declines in
production/sales volumes. Accordingly, a profit payment of $814,000 will
be made from the existing reserve of $2 million. In addition, a $400,000
reserve will be established for anticipated parts obsolescence pending
completion of a study of production materials and high performance parts
inventories.
A reorganization of Shelby American
operations and a resourcing of 1968 model production to [A.O.] Smith
Plastics in Ionia is currently in process. Preliminary information
indicates that important operating and financial benefits should result
from these changes. Specific plans are projected financial results will
be submitted for approval in the near future.
Notes:
- A quick drill-down into the
numbers:
Year
Cars Built Profit/(Loss) P/(L)
per car
1965 500
($311,000)
($622)
1966 2,335
$310,000
$133
1967 2,684
($764,000)
($285)
- Adjusted for inflation, the
$764,000 loss suffered by Shelby in 1967 would be roughly equivalent
to $5,522,484 in 2016.
- How coincidental is is that
the profit in 1966 very conveniently offsets the prior year's
losses? There is no doubt that the 1,000-car Hertz
deal in 1966, is what kept the Shelby Program alive for another
year. The $600,000 swing in just 12 months time is also the
underlying reason that Shelby felt it safe to expand from a single
model car in 1965/1966 to six different model cars in 1967.
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