General manager says Haas not looking to sell despite legal woes
LONG POND, Pa. -- Nearly a year has passed since Nextel Cup team owner Gene Haas was arrested on federal tax evasion charges in California, and speculation has arisen recently that resulting financial strain could mean Haas/CNC Racing may soon be sold.
Haas/CNC general manager Joe Custer said Saturday that there is no truth to that speculation, and explained that the race team is technically an extension of Haas' lucrative machine tool operation, Haas Automation, rather than a personal business owned solely by Haas.
Custer said Haas' personal legal issues -- he was accused last June of running a bogus invoicing scheme to create fake tax deductions -- have no bearing on the parent company's performance or stability. According to the indictment, Haas cheated the government out of $12.5 million on his personal tax returns, and $7.7 million on Haas Automation's returns in 2000 and 2001. He was released on $10 million bail in June 2006 and is due in federal court in September.
But what about the race team? What impact does it have on them?
"None," Custer said bluntly. "It's all a personal thing [for Haas]. Haas Automation is the parent company. With any owner or major shareholder or large corporation manager, personal things get handled personally and that doesn't affect what happens in a large organization. The key is keeping the organizations profitable."
That doesn't seem to be a problem. Custer said Haas Automation enjoyed record profits last month, and is making substantial gains in the complex export business, especially to China and other Asian markets. A company press release in January boasted that 2006 was the most productive year in the company's history, up nearly 25 percent from 2005 to the tune of some $740 million in revenue. Projected revenue for 2007 was expected at upwards of $800 million, according to the release.
"Their growth is astronomical," Custer said. "I don't know if you follow the machine tool business, but in that industry they're No.1 in the world. Gene is focusing on that program, as he well needs to. That's the mothership, so to speak."
While many teams, including Evernham Motorsports and Robert Yates Racing, are seeking investment partners to bolster their teams financially, Custer said Haas/CNC is debt-free and often approached by other teams to form alliances.
"People are approaching us because of our financial strength," Custer said. "People are looking for a Haas Automation to buy into the sport. Anytime you look for mergers, you look at strengths and weaknesses and want something that comes out of it stronger than the two separates were prior.
"And us, our whole financial thing is in place. Any opportunities we look for with people would be about a third and fourth team, and that being the people component. It's a fluid situation. [Merging] is a topic. It seems like there's always a willingness to talk to people, and people approach. And not so much that they want to do a deal, but it's more like doing due diligence."
Custer said there is no plan to break away from the current alliance with Hendrick Motorsports, which supplies the team's engines and chassis.
"That's not on the table. Our strengths are our financial situation, our technology and our relationships," Custer said. "So why would you take away strengths and trade them out for something that isn't a strength?
"Business deals go down every day in this garage. I don't know what other people are looking at, but we're focused on winning races and championships, and being here for the long haul."
Haas, which fields the Nos. 66 and 70 Chevrolets for drivers Jeff Green and Johnny Sauter, respectively, has taken several measures recently to bolster the program. They bought a 50-passenger commercial jet. They built a brand new 140,000 square foot shop. They're building an innovative rolling wind tunnel.
They're also hiring elite talent. Former Penske Racing and Michael Waltrip Racing crew chief Matt Borland -- who without question is one of the smartest engineers in the garage -- recently came onboard to oversee competition.
"Haas/CNC Racing is experiencing enormous growth," Custer said. "We're installing huge technology, but in relation to Haas Automation it's a very small portion of the big picture. But it requires 100 percent focus.
"Haas/CNC Racing is going to stay the way it is -- moving forward [and] growing. There's no change in strategy. We are realigning management. [Haas], you won't see him coming to the track much because of all the growth that's going on.
"We have no debt. We are a very stable program."
Marty Smith covers NASCAR for ESPN.com.
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