Speed in the USA

Dec 31, 2012

Rick Lowery has always had a need for speed.

In 2002, he realized his dream with the establishment of Denver-based USA Performance Engines. The shop builds motors for circle track and drag racing as well as everyday street cars, hot rods and even Harley-Davidson motorcycles.

For Lowery, who originally spent 20 years in the automotive repair business, the foundation of USA Performance Engines came at the perfect time and involved a fateful friendship with local and national Sprint car driver and master engine builder John Gerloff.

In the mid-1990s, Lowery hired Gerloff to drive for his racing team and help his stepson, Nick Haygood, transition from racing small cars to larger Sprint cars, and show him how to become a good, well-respected race car driver.

“One day, John and I were sitting down after he’d been driving for me for several years. He said, ‘Let’s do something to make money instead of always wasting our money racing,'” Lowery says. “I grew up always with a passion-I loved taking things apart and making anything I had faster. It didn’t matter what it was; I just liked to make things faster. I ran into John Gerloff, he had the same type of personality and we just immediately hit it off.”

Gerloff and Lowery’s idea to start what they wanted to be “the most well-equipped, state-of-the-art engine shop in the area” also happened to double as Lowery’s exit strategy from the automotive repair business. Lowery owned as many as four successful automotive repair shops in the Denver area between 1981 and 2002; he officially exited the business in 2006 with the success of USA Performance Engines.

“It was the right time and moment to take what was at that point a hobby and move it into a real business,” Lowery says.

Four Guys, One Engine Shop

Lowery, his wife Cindy, who does all the accounting for the business, and Gerloff started the business in a 10,000-square-foot facility in Denver. They were soon joined by cylinder head specialist Mike Rowles and master machinist Jeff Taylor.

“Basically when we started the engine shop we had the same three guys that we have today. Our guys are seasoned veterans that have been building engines for many, many years and I’ve been very fortunate to be able to keep those same three guys this entire time,” Lowery says.

Because Lowery had a racing team that had been dominant in the area for several years, and Gerloff was a nationally recognized racer, Lowery says that USA Performance Engines’ work developed immediate credibility. He credits the high quality of the shop’s engines to Gerloff’s versatility as a racer and an engine builder who “really understands what other drivers struggle with.”

“We started it from nothing. We had no customers; we started at ground zero. It’s very rare that shops do that nowadays. The engine business takes a while for word of mouth to spread to where people learn about you and trust your stuff,” Lowery says.

Lowery’s stepson Haygood’s success as a racer and prominent track record-holder also brought recognition to USA Performance Engines. The young driver set a new all-time track record at the Knoxville ASCS 360 Nationals and set the all-time, all-division track record at Colorado National Speedway, qualifying at 13.248 seconds.

“We still continued to race because that’s how we sold a lot of our engines,” Lowery says. “We showed up to the race track and if we did really well, then a lot of people wanted our engines.”

Wild Hogs

A unique enhancement to USA Performance Engine’s business in the last few years is its partnership with local Harley-Davidson motorcycle dealerships and repair shops, something Lowery says the shop got into during the economic downturn in 2008 when many racers didn’t have much disposable income.

“We do a lot of machine work for almost every Harley dealer in the state, and a lot of independent Harley repair shops as well. In fact, we’re so well-known for it, a Harley shop moved in next door to us that does repairs and we do all of their engine machine work for them,” Lowery says.

For the last two years, USA Performance (www.usaengines.com) has also been building Sprint car engines for Bruce Williams Racing in Des Moines, Iowa, which races on a weekly basis in Knoxville with some high-profile drivers. The USA Performance Team is currently building two new 410 Sprint car engines for the team to race during the 2013 season.

“It’s really fun when you get to work with a guy like Bruce Williams, because they’re putting our engines to the absolute test at Knoxville,” Lowery said. “Knoxville is known for being really hard on engines.”

Although 10- to 15-percent of USA Performance Engines’ work comes from out of town, most of its business is from Colorado racers. Lowery says the engine shop has a unique “open-door policy” where customers can come into the shop whenever they want to watch over their projects.

“We try to educate people along the way, so that they understand what is actually inside of an engine, whether it’s a race engine or a just a street car engine, because a lot of people don’t really understand. We have an open-door policy where a guy can come in and really see his project and feel a little better about what’s he’s getting,” Lowery says.

Welcoming customers into the work area is only one part of USA Performance Engine’s personalized service. Each employee on the four-person engine building team has his own relationship with the customer as well. Since each guy has a specialty and there isn’t much overlap in tasks, if a customer has a specific question, they know just who to go to for answers.

The Business of Racing

Every engine project starts by gauging a customer’s expectations, needs and budget.

“If a customer comes in and has unrealistic expectations and doesn’t have enough of a budget for what they want to do, it makes it really tough,” Lowery says. “So we try to get those two things aligned so that we can give them a realistic project for a fair price, regardless of what that price range is-whether it’s a $2,000 engine or a $50,000 engine.”

Once a customer’s needs, expectations and budget are calculated, the shop will provide a detailed estimate of how much all of the parts and labor required will cost, and a timeframe for completion. The engine building team’s equipment allows it to turn things around in 24 hours if needed, but an average project usually takes between three and six weeks for a complete build.

After the project is approved by the customer, the shop asks for a small deposit and then starts ordering parts for the engine.

“When all of the parts arrive, we go through and inspect each part to make sure it’s exactly what we ordered,” Lowery notes. “Sometimes things get mis-packaged or mis-boxed, and we try to use the highest-quality parts we can for each project.”

Changes are then made to certain parts for particular applications if necessary. After the engine is assembled it is tested on the engine dynamometer, which Lowery says provides a lot of information and ensures quality control.

“It gives us an opportunity to break-in the engine in a controlled environment and gives us an opportunity to make sure that there are no leaks and that the engine performs exactly how it is expected to,” Lowery says. “And if there’s a problem, we’ll correct it then instead of letting a consumer get a project that’s less than 100 percent.”

He says on occasion Sprint car drivers come to the shop in a bind with broken engines and a race scheduled for the next day.

“People come to us because they know that if they do require something that’s completely out of the ordinary, if it’s even possible, we’ll do it. That builds a ton of customer goodwill,” Lowery says.

As for prices for services, Lowery says USA Performance Engines sets its prices based most importantly on economic conditions. It also considers local competition and Internet pricing.

He says the business hasn’t been able to really raise prices in the last four to five years because racers have struggled with the economy just like everyone else.

“There is no magic formula. We try to keep things affordable because if we chase a racer out of the business because it becomes so expensive that they can no longer do it, we lose a customer,” Lowery says. “And they are hard to come by these days.”

When it comes to the performance parts side of their inventory, Lowery says he orders weekly from mostly direct manufacturers like Triple X Race Components and Winters Performance Products. However, since most of the shop’s engine work is customized, most orders are made as needed.

“We try to keep our overhead low by not having a huge amount of inventory on the shelves, because that inventory could become obsolete due to newer technology. Our inventory is very controlled-”we try not to have a massive inventory that winds up sitting dead on the shelf,” Lowery says.

A ‘New Era of Race Engines’

To Lowery, the biggest obstacle in the business is staying informed and up-to-date with the newest technologies, equipment and designs. Equipment can be very expensive and so can sending guys to different schools or seminars, but USA Performance Engines continually strives to evolve.

Lowery says the company is always willing to try new things and likes to establish relationships with manufacturers to keep informed on new technologies.

“A lot of the technologies that we’ve been using in racing in the last 20 years have been around for 40 or 50 years, so we’re getting into a new era of race engines; they’re very high-tech now,” Lowery says. “I think the guys that settle for building the same engine day after day and aren’t looking to be at the forefront-¦ your business is probably already going backward if you’re not constantly striving to be better. I think that if you’re not constantly looking for that new edge, you’re going to become extinct very quickly.”

While Lowery says that USA Performance Engines is always looking to evolve its technologies, the business has no plans to expand its staff anytime soon.

“Most businesses can actually take in more work and maintain the same staff. For us, it’s so important to keep the consistency of the three (other) guys that work so well together. To me, that is more important than trying to be the biggest engine builder out there. We just want to do what we do and do it well,” Lowery says.

In addition to producing consistent, quality power plants with an expert tenured staff, USA Performance Engines also likes to maintain consistent relationships with its neighboring businesses and dealerships. For example, the company rebuilds a lot of Toyota engines for independent companies around town. To reciprocate the business from Toyota, they will try to buy the parts needed from a Toyota dealership nearby.

“We try to utilize the people that are close to us and reciprocate that type of work,” Lowery says. “We try to establish relationships where if they use us, we’ll use them.”

The shop also gains exposure by advertising at local racetracks, setting up booths at car and motorcycle shows and sponsoring racing organizations like the Rocky Mountain Midget Organization. Lowery says he likes establishing goodwill with the racing community.

And he considers working with young Sprint car drivers to be one of the best parts of his job. He finds them impressionable and likes helping them develop their legs in racing.

“It’s always fun to work with young guys,” he says. “It keeps me young.”