By: JASON LOCKE on January 16, 2012
Original Article: STAGE3MOTORSPORTS.COM

Believe it or not, there was a time when Saleen demanded worship and deserved absolutely all of it. Their Fox Body specialty Mustangs, especially the supercharged versions, were the best way for Mustang fans to fly by Porsche owners while giving them a quick wink out of the window and redlining the supercharged, high-output Windsor 5.0L. The body kits screamed racing with their sweet curves that extended from their front air dams, to their side panels and ending at their gorgeous rear fascias topped off with one the most elegant spoilers to grace a Mustang. The sporty looks, massive performance hikes and Steve Saleen’s racing name skyrocketed the humble Saleen Autosport onto the national stage. Further developments with the SN95 Mustangs brought in outside investment from Hancock Park Associates in 2001 that allowed Saleen to expand exponentially and made Hancock majority owners. At one point, Saleen offered 12 different production vehicles out of its catalog, including several Mustang variants. Saleen’s vehicle production culminated with the production of the S7 Supercar that performed well in the Le Mans series while being the envy of the supercar world at the time. The S7 was the high water mark of Saleen, and the company began a downward spiral in the mid-2000s that saw the shuttering of the famed supercar and the eventual termination of all vehicle production under the Saleen name in 2011. Most outsiders look at the sad state of Saleen as being a mere side effect of the global financial meltdown of 2008, but Saleen’s ultimate fate was written long before by short-sighted decisions, management struggles and competition from other manufacturers and Mustang tuners with superior business models. The Great Recession simply put the finishing touches on a coffin that was well-built by 2008.

The first ripples in the supercar sector

The first signs of trouble began appearing in 2003 with the same S7 that put Saleen on top of the world. Saleen had hoped to sell 35 of the supercars in 2003 while gradually working their way up to 50 per year afterward. In reality, only 13 were built in 2003 and 8, 14 and 16 produced in 2004, 2005 and 2006 (see Stage 3’s Saleen production numbers), according to the National Highway Traffic Safety Institute (NHTSA). The huge $585,000 price tag and competition from better-established supercar manufacturers with both faster, and similarly priced vehicles, were the most likely factors that led to the S7’s eventual disappearance from the production lines. Saleen’s next foray into the supercar world was with the extremely short-lived Ford GT. Saleen secured a contract to paint and build roughly 95% of the components in each GT, with the final production touches done at Ford’s Wixom plant. Hancock provided an influx of cash that allowed Saleen to open their Troy, Michigan manufacturing facility, Saleen Special Vehicles (SSV) in 2003. The 200,000 square foot SSV facility was responsible for Ford’s GT production, as well as aiding in Saleen’s own Mustang retrofitting operations in conjunction with their main 295,000 square foot production facility in Irvine, California. The purchase of the SSV facility was a questionable investment, at the very least. Ford had planned the GT as a limited production vehicle from its inception, and all GT operations ceased in 2006, leaving Saleen with two massive production lines and dwindling demand for their full usage. The S7’s overall flop and the end of the GT was largely overshadowed by the massive success of Saleen’s Mustang operations, that had grown from a three car run in 1984 to upwards of a thousand Mustangs per year in addition to other specialty Ford vehicles, keeping both the Irvine plant and SSV plenty busy for a time. Still, overly-optimistic forecasting, poor pricing and the rise of fierce competition would come back and haunt Saleen, Incorporated and even taint their vaunted Mustangs.

Bread and butter: the Saleen Mustang

Saleen’s Mustang production had remained steady through the late ’80s and into the early ’90s, but exploded exponentially with the arrival of the fourth generation SN95s. Ford’s underpowered production Mustangs received a massive boost in horsepower and torque, along with a sexy body kit filled with luscious curves and unique openings, that made the new lineup of Saleens a performance enthusiast’s dream and left a unique chapter in the Mustang’s legacy. Saleen even offered a massive 5.8L V8 in their S351 that boasted 480 horsepower in its supercharged form — almost unheard of at the time. Saleen easily won out as king of the specialty car manufacturers during the late ’90s and early 21st Century with their brutally powerful vehicles and by far best-looking body kits on the market. Saleen’s repertoire of modifying factory vehicles expanded to include Ford F-150s, Explorers and Focus. Production reached its apex in 2006, with 5000 total vehicles produced, including over 1600 S281 Mustangs based on the new S197 platform. Saleen even opened a retail store in Irvine that sold everything from T-shirts to Parnelli Jones edition Mustangs and was managed by Steve Saleen’s daughter, Molly Saleen. Yet, problems were heavily afoot. The huge investments made into Saleen’s Ford Thunderbird, Contour and other concepts never fully came into fruition with unknown amounts spent on their research and development. The F-150s and Explorer models never really caught on with the average sports enthusiasts, and their sales were abysmal, but again, Saleen’s Mustangs carried the day and remained briefly isolated from the company’s own turbulence.

Courtroom hot water.

Then came legal problems that brought with them some of the heftiest fines and rewards in California’s history. The N2O and S121 Focus earned Saleen a $700,000 fine from the California Air Resources Board (CARB) because of their nitrous systems. Saleen shipped California-bound Focus models with it’s nitrous lines disconnected and the bottle unfilled in an effort to get around various clean air laws. After the customer would hook up the nitrous system and fill the bottle, Saleen (and Ford, for that matter) would terminate warranty coverage. CARB was not fooled and filed a lawsuit in regards to the 38 Saleen N2Os sold in California from 2004 to 2005. The case was settled out of court with Saleen admitting no fault. Saleen was again caught up in legal wrangling over a troublesome 2005 Saleen S7 Twin Turbo. Supercar addict Dan Echino bought the problematic car from its previous owner who had experienced some engine and overheating issues. Mr. Echino would experience five engine failures, three transmission failures and a slew of other issues. What Echino and the previous owner weren’t told was that this S7 also blew its engine twice during Saleen’s own testing before even being sold. Echino filed a lawsuit in 2007 under California’s Lemon Law and was rewarded $525,000 dollars in April of 2009.

Thus falls Saleen

Saleen, Incorporated began unraveling in 2007. Competition from the Shelby GT500, ROUSH Performance’s ”Staged” Mustangs and other specialty Mustang tuners provided sports enthusiasts suped-up S197s that rivaled or exceeded a Saleen Mustang’s performance at far lower prices. Mustang production at Saleen fell below 1300 units, including the 500 Parnelli Jones Special Edition Mustangs solely created for that year. The failure of the S7, the end of GT production, legal troubles and development costs of cars that never made it to production lines had taken its toll. With its seemingly invincible Mustang lineup now taking nicks in its armor, the management struggles began. Hancock named Daniel Reiner CEO in early 2007. Steve Saleen, along with Chief Technology Officer Billy Tally, left his company on May 14th, 2007, a few months after his wife, Elizabeth, did the same. Domestic Programs Manager John Spruill left in June to join Steve Saleen and Tally on another start-up. Reiner was replaced by Paul Wilbur in August 2007. Supply issues began as debts piled up, causing both replacement parts for Saleen vehicles and aftermarket accessories for the general public to go on extended back orders or be discontinued altogether.

The layoffs began in early 2008 at Saleen’s Irvine headquarters. Engineering and production staff were handed their pink slips first. More followed. Chris Theodore was made CEO on August 8, 2008 in place of Paul Wilbur — Saleen’s third CEO within a year. Four days later, on August 12th, Saleen began auctioning off nearly all of its equipment in both Irvine and Michigan. What wasn’t sold was thrown away. Legal disputes over production rights and debt between Saleen and its suppliers led to the destruction of parts and molds that many would kill for, including all of the body moldings for the S7. The layoffs continued in preparation for the eventual shutdown of the Irvine plant and consolidation of all Saleen operations to Michigan. Despite the elimination of nearly all of its employees, production equipment and facilities, Saleen was not saved.

The beginnings of the recession in September of 2008 wiped out what little was left, as Saleen Mustang sales plummeted with only 370 S281s and H302s being produced. With few options left, Hancock Park Associates announced that Saleen, Incorporated was up for sale in November of 2008. The majority of Saleen’s assets were sold to MJ Acquisitions in February, 2009. MJ inherited both Dan Echino and CARB’s lawsuit, along with a mountain of debt owed to various suppliers and other manufacturers. Many of the supercharger and body kits that were part of their acquisition turned out to be incomplete, which hampered Mustang production through 2009 and 2010. Despite maintaining excellent performance and a gorgeous appearance, the new Saleen models sold poorer than hoped, and was further obstructed by Steve Saleen’s 2010 lawsuit over the use of his name for MJ Acquisition’s Mustangs, practically killing their newly-announced 435S model. Saleen, Inc, defunct since 2009, officially disappeared along with MJ Acquisitions to become Revstone Performance Vehicles in 2011, part of the Revstone Industries family of companies. Revstone announced in March 2011 that they would stop producing vehicles under the Saleen brand name to focus on supplying parts, making the 2011 S302 the last Mustang to bear the title. Whether Revstone plans on producing Mustangs under its own marker in the future is currently uncertain.

The remnants of Saleen reside in a 33,000 square foot building in Troy, Michigan, a far cry from the massive production facilities and cavernous offices of days long since past.

Steve Saleen and his latest ventures.

After Steve Saleen and his family departed Saleen, Inc in 2007, he went on to several start-ups before founding SMS (Steve Mark Saleen) Supercars in 2008. His first venture with Chamco aimed to bring cheap Chinese trucks and SUVs to the American market. Hurdles dogged the entire enterprise from the beginning. The Chinese trucks had questionable safety records and very liberally borrowed design elements from other manufacturer’s vehicles, like the BWM X5 and Toyota Tacoma. Battles between two camps within the management structure and allegations of fraud in both directions finally ran the entire company into the ground. Steve went on to found SMS, but played a key role in the upstart performance company Techco that was founded by other Saleen alumni to build twin-screw supercharger systems and other aftermarket parts. Techco provided much of the supercharger technology currently used by SMS in their 296 model. Techno lasted under a year before closing. SMS currently builds heavily modified Dodge Challengers, Chargers, Chevy Camaros and Ford Mustangs in true Saleen fashion with awesome body kits and amazing horsepower ratings.

What is left of Saleen.

The real tragedy of the last few years isn’t the death of brand or company, but the overshadowing of remarkable vehicles and the drying up of replacement parts for the older Saleen cars. The new Saleen/Revstone S302 is absolutely stunning. While its not the most powerful car, its spectacular body kit rivals any rival Mustang tuner with an aggressive front fascia and hood combination that makes it ready to hunt. Ford’s 5.0L Coyote saw a bump up to 425 horsepower from its baseline 412, while a Saleen exhaust gives the S302 a brutal roar. Uprated brakes and suspension round it out and let the S302 fly down the track. Alas, the $54,000 price tag is a bit of a turn off, and maybe final proof that you need more than a name to justify price points. The small ray of hope is that Revstone takes the lessons learned from this whole ordeal and crafts something to be proud of out of the ashes. Owners of ”true” Saleen cars struggle to scrounge up parts for their aging Saleens and frequently turn to knock-offs due to the dwindling inventories of ”true” Saleen parts.

Steve Saleen hasn’t sat idly by and plans on competing in the Mustang tuning game with his SMS 302SC. The SMS creation boasts 535 horsepower and uses an SMS 296 twin-screw supercharger on top of its Ford Coyote engine to make its massive power. With Revstone shutting down vehicle production, SMS loses one competitor, but several more are still thriving and command a massive share of the tuner car market. Whether or not the SMS 302 with its $54,000 price tag in its naturally aspirated form (add $10,000 for the supercharger) can actually be competitive still remains to be seen.