Saleen says auction is not a fire sale

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As Mark Twain might say — if he’d been in the business of building high-performance automobiles — news of Saleen Inc.’s demise appears to be greatly exaggerated.

Last month, websites aimed at specialty car buffs were circulating reports of an auction of Saleen property that smelled suspiciously like the kind of fire sale that accompanies a bankruptcy filing. Besides the usual cache of chairs, desks, filing cabinets and other office essentials, the auction catalog for the niche automaker included machine tools, car parts and — gasp! — 20 vehicles.

Saleen exec Marques McCammon, while acknowledging that his firm is dealing with some of the same woes as their larger car-making brethren, insists the company isn’t on the brink of insolvency. In a recent memo, McCammon ticked off a list of current and upcoming Saleen projects, including a refreshed four-vehicle lineup for 2009, launch of the new Racecraft performance marque and continued development of its S5S Raptor supercar, above.

“Now, I may not be the brightest guy, but I would guess that you don’t make these kind of investments/announcements if you are planning on closing your doors in a month,” McCammon wrote.

In fact, he hinted in an interview Thursday that the other rumor floating around about Saleen — that the company may be a bidder for Chrysler’s Viper sports car business — may be true.

So what’s with the auction?

According to McCammon, the private equity firm that owns Saleen, L.A.-based Hancock Park Associates, last year bought Michigan automotive component supplier ASC Inc. Besides being the catalyst for moving the company’s center of gravity from Irvine to suburban Detroit, the deal left the firms with a heap of redundant office supplies, car parts and factory equipment.

“I had a stockpile of assets that was doing not much more than collecting dust, and I decided to auction them off, as any other business would do,” McCammon said. The cars, all used vehicles, were tossed in as sweeteners, “nothing more, nothing less.”

That said, these aren’t exactly turbocharged times for Saleen, the company founded in 1984 by race driver Steve Saleen. (The founder went his own way a while back and this year launched a new Anaheim-based company, SMS, to develop modified versions of born-again American muscle cars such as the Ford Mustang, Chevy Camaro and Dodge Challenger.)

Saleen Inc.’s principal products are hand-built, heavily modified versions of the Mustang. They start at about $50,000 and go to the top-of-the-line S302 Extreme, which costs $80,000, boasts 620 horsepower and is designed to compete with the Corvette ZR1.

(The company also produces modified pickup trucks and special-edition Mustangs. It no longer makes the S7, its signature $650,000 supercar. The Raptor, expected to go on sale in about two years, will be another fire-breather, but will be priced considerably lower at $185,000.)

McCammon said sales are down about 40% this year compared with 2007, when the company sold some 1,600 vehicles. Analysts said Saleen is caught in the same downdraft that is bedeviling most players in the U.S. auto market, where a slowing economy, the housing market collapse and the credit crisis have combined to turn dealer lots into deserts.

“We’re just like every other car company out there,” he said. “We’re just looking to get more sales. We’re not screaming and running for the doors, as everyone is trying to imply.”

And that Viper thing?

Well, McCammon, Saleen’s general manager/vice president of car and truck operations, is a former Chrysler guy, as is the company’s chief executive. ASC and now Saleen have been applying the Viper’s high-tech paint jobs in their state-of-the-art paint facility since the car debuted in the 1992 model year. They also make sub-assemblies for the Viper.

Oh yeah, and Saleen just hosted 1,000 Viper owners and enthusiasts as part of its annual gathering in Detroit.

“We have a very aggressive interest in the Viper,” said McCammon, who declined to comment on whether there have been any talks with Chrysler to acquire the brand. “We have a very vested interest in the Viper and the future of that vehicle.”

Tom duPont, publisher of the duPont Registry, a luxury lifestyle chronicle, noted the Viper-Saleen connections and concluded: “It fits right in.”

-- Martin Zimmerman