The Race May Go to the Swift but Profits Come More Slowly

On Saturday, Bill Fickling was at Sears Point International Raceway in Sonoma, north of San Francisco, to watch his two race cars compete in a Sports 2000 class race. The cars, built by Swift Cars in Anaheim for Fickling’s racing team, can reach speeds of 135 m.p.h. But not this day. Both cars crashed on the first lap.

Fickling wasn’t too unhappy, though. He’s also president of Swift, and another Swift car built for a different team did win the race--which was not surprising, because 24 of the 29 cars in the field were made by Swift.

If the cars that run in the Indianapolis 500 or Grand Prix of Monaco represent the major leagues of auto racing, Swift builds cars for the sport’s minor leagues. Swift’s race cars, most about 10% smaller than Formula One race cars but with similar lines, cost up to $56,000 and compete in four classes sanctioned by the Sports Car Club of America.

The classes are Formula Ford, Formula Ford 2000, Sports 2000 and Formula Atlantic. Some of those classes have pro races with prize money, but most carry no purses, have very little commercial sponsorship and often serve as preliminary events for better-known classes.

And while Swift has yet to hit $2 million in annual sales and has suffered from financial problems, there is nothing minor league about its on-track accomplishments. Ferrari or Porsche should hope to win as often on the Grand Prix circuit as Swift does in its own classes.

Swift’s cars dominate each of the four classes they compete in. As of June 1, Swifts had won 37 of the 42 national races they entered, said Fickling, who just became president of the firm in May.

“Everybody goes out to beat the Swifts,” said John Zimmerman, editor of SportsCar magazine, an SCCA publication. “They revolutionized Formula Ford so much you almost had to have a Swift to win.”

Swift, founded in 1983, also earns grudging respect from competitors. “Although we can beat them on occasion, they have captured the imagination of the marketplace” with their cars, said Brian Robertson, who is the U.S. dealer for Ralt Ltd., a British company whose cars run against Swift’s.

While Swift enjoyed success on the track, its finances were another matter. “The company was upside down” early this year, said Fickling, as Swift had a negative net worth, with its debts exceeding its assets. Swift, despite “enjoying great success, was always undercapitalized,” he said.

New Cash Infusion

Recently, however, Swift got a fresh boost of financial horsepower. In May, Malibu Grand Prix, a Woodland Hills company that operates a chain of tracks for teen-agers and adults who tool around in small-scale Formula One race cars, acquired 51% of Swift. In exchange, Malibu has provided Swift with much needed cash, although Malibu and Swift officials declined to say how much. (Last year Malibu turned a $2.6-million profit on sales of $30.2 million.)

The deal appealed to Malibu Chairman Ira Young, 61, and his wife, Lori, because both have owned and driven race cars in recent years, and Fickling managed their team for a while. Young also was part of a four-driver team that drove a Mazda RX-7 that won back-to-back championships in 1984-85 in the GTU class of the International Motor Sports Assn.

When Malibu bought its stake, Fickling was appointed president and assigned to handle the marketing side of the business. He brought with him Jim Chapman, a race car builder for 30 years, as vice president to supervise construction. Fickling, 37, and Chapman, 52, each owns 24.5% of the company.

All Swift cars have open cockpits and are sold without engines, which are bought elsewhere and cost from $4,500 on up. Some Swift cars have Fiberglas bodies, while others are made of a composite material of carbon fibers, aluminum and Fiberglas. The cars, which reach speeds of 130 to 160 m.p.h., range in price from $21,900 for the Formula Ford cars to $55,900 for Formula Atlantic models.

Well-Heeled Hobbyists

Many drivers of Swift cars are young men who one day hope to drive at Indianapolis or Monaco. Former Indy winners Danny Sullivan and Bobby Rahal drove in Formula Atlantic races early in their careers. But most drivers tend to be well-heeled hobbyists, like Malibu’s Young. Even in racing’s minor leagues, it can cost $30,000 to $100,000 to compete in 20 or 25 races a year.

One man who once dreamed of driving at Indianapolis is Fickling. From 1975 to 1978, he was a top driver in the Formula Ford class. “I never was out of the top three or four,” he said, adding that his victories total 15 to 20.

“Like most guys, I harbored those thoughts” of driving in the Indianapolis 500, Fickling said. “I just didn’t have the financing.”

A San Clemente native, Fickling knew he wanted to be a racing driver after attending his first race, in 1967 in Riverside, when he was 16 years old. Four years later, he paid $1,300 for a modest car similar to the Formula Ford 2000 cars of today.

Fickling kept racing on weekends for the next 11 years. With no prize money to be won, he financed his hobby by installing cable-television systems. But in 1980, he found he could make more money fixing cars than racing them, so he began repairing race cars through his P-1 Racing company.

Within weeks he met Chapman, who ran his own business, Jim Chapman Developments, a few blocks from P-1 Racing in San Clemente. Chapman, born in Felixstowe, England, had been a well-known car builder in British and American racing circles and helped design cars raced by such stars as Jackie Stewart, Al Unser Sr. and Mario Andretti.

Car Radically Different

Shortly after they met, Chapman, who still builds chassis and other components for race cars, and Fickling built a 12,000-square-foot plant in San Clemente to house their businesses. And Fickling became a dealer for Swift Cars.

Swift was formed in 1983 by four men, including another race driver named Robert K. Smith. They sold stock to about a dozen investors and racing enthusiasts--including Fickling--to raise the $100,000 needed to build a prototype Formula Ford car, Fickling recalled.

The car was radically different from the cars of its day--more aerodynamic, in part because its front was 25% narrower, centralizing the weight and improving handling. The changes added up to more speed. When the car was first tested in late 1983, it easily broke the lap time for that class of car; two weeks later it won the national championship. Swift was on its way.

Sold Below Cost

The company expanded into Formula Ford 2000 and Sports 2000 designs, each time selling more stock to investors to pay for development. Then, in 1987, Swift began building the high-priced Formula Atlantic cars. But this time, Swift tried to develop the car without seeking more outside money and “that was really the beginning of the problems,” Fickling said.

Swift set a guaranteed price of $40,000 for the car “before they’d seen any drawings,” Fickling said. The company sold 22 cars, but because engineering and tooling cost much more than expected, most of the cars were sold at or below cost. Moreover, Swift’s cash was drying up, and the company began using deposits on new cars just to meet its bills, Fickling said.

About half of Swift’s revenue comes from selling spare parts to drivers that own Swift cars. But Swift “had spent so much time on new models every year that they started to fall down on the service end of providing spare parts,” Fickling said. Other companies began cloning Swift parts and selling them, helping Swift post a loss last year.

Early this year, Smith, who owned 57% of the company and was president, “was becoming more and more disenchanted,” Fickling said. “He pretty much wanted to go racing on his own and he contacted me” about taking over the company, he said.

Smith confirmed that “it was not a business that I personally wanted to spend all my time with,” and that his racing-related absences were “a deterrent to the success of the business.”

Some Improvement

Fickling agreed but knew he needed more capital. So he called his friend Ira Young.

“There wasn’t anything wrong with the company,” Young said recently. “It was just woefully undercapitalized.”

In a two-step transaction, Smith turned over his stock to Fickling in exchange for Fickling’s promise to assume Swift’s liabilities and to repay a “six-figure” loan Smith had made to Swift. Malibu then acquired its 51% stake in exchange for giving Swift a line of credit, Fickling said.

So far, things are improving this year. Fickling said Swift hopes to sell 50 cars, hit $2 million in sales and break even. Young said he expects Swift eventually to help boost Malibu’s earnings, but there is another possible goal. Malibu and Swift are thinking about moving up to the big leagues by designing a car for Indy-type races.

The effort could cost $1 million just for engineering and testing before the car ever sees competition. “But most certainly it’s an ambition of Swift,” Young said.