Ex-Racer Collided With FTC En Route : Granatelli Steered Winding Course to Helm of Garage Chain
Like his race cars, Andy Granatelli’s career has taken a winding and risky course.
It has taken him from staging accidents in hot-rod shows to fixing cars in a chain of tuneup shops. Along the way, it collided with the government.
Now, at 62, Granatelli is chairman and chief executive of Woodland Hills-based Andy Granatelli’s Tuneup Masters, a chain that performs simple car servicing at set prices.
“We’re a no-rip-off service, no surprises,” Granatelli said. “People are tired of coming into places and hearing a price quoted and then paying double that amount.”
By Granatelli’s own account, he did did not always take the what-you-see-is-what-you-get approach. He says he packed ‘em in at hot-rod shows in Chicago in 1948 by secretly paying some drivers to cause crowd-pleasing pile-ups.
Troubles at STP
The Federal Trade Commission also has questioned whether customers got what they expected from an earlier enterprise with which Granatelli was associated.
A study by the FTC that began in 1971, when Granatelli was president and chief executive of STP Corp., resulted four years later in an order banning use of advertising claims alleged to be false and misleading. The government declared the STP oil additive to be of little value to most cars. The cease-and-desist order was accepted by STP.
Granatelli insists the case didn’t reflect on him personally because he left the company more than a year before the FTC action.
Granatelli continues to maintain a high profile, still putting his 5-foot-10, 300-pound frame in front of the cameras for ads, now for Tuneup Masters. The trench coat he used to wear is gone; now he wears a racing uniform and poses inside a car.
Still Racing
And Granatelli still shows off his racing ability. Last month he drove a street-legal 1982 Camaro across a one-mile stretch at the Bonneville Salt Flats in Utah at 241.731 m.p.h. In July he drove a 1983 Caprice Classic at 194.387 m.p.h., carrying three passengers. Both runs set passenger-car records.
Granatelli, a Calabasas resident, has chronicled his life in a book, but relatively little information is available about his company. Granatelli owns 85% of the stock, and Jerry Dres, the president and founder of the chain, owns 15%. The company won’t disclose much else.
Granatelli won’t even say how many of his owned-and-operated outlets there are. A partial list on the back of a receipt shows 123 in California and 126 locations in Arizona, Nevada, New Mexico, Oklahoma and Texas. Industry estimates are that there are about 350 outlets.
‘Granatelli Blue’
All are painted the same dark “Granatelli blue,” which is also the color of the company’s corporate headquarters on Ventura Boulevard. The company employs 125 people there, Granatelli said.
Tuneup Masters is part of a specialized industry, a niche within the auto service business. Similar companies include Econo Lube N Tune Service Centers of Newport Beach and MP&G; Tune-Up Centers, part of Los Angeles-based Atlantic Richfield.
Granatelli’s wholly owned chain is much bigger than his franchising competitors. MP&G; has 85 centers in the Los Angeles area. The 60 Econo Lube N Tune shops in Southern California have a combined annual revenue of more than $20 million, according to company officials.
As its name implies, Tuneup Masters does most of its business in tuneups. Like others in the fixed-price auto repair business, it replaces spark plugs every time, but leaves alone other parts, such as points, unless they’re worn out.
Each shop works on a maximum of 50 cars a day. Customers are charged $45.95 for four-cylinder engines and a dollar more per extra cylinder. Tuneup Masters also performs fixed-price oil changes and lubrication jobs.
At Econo Lube N Tune, rates for a tuneup range from $34.98 to $44.98, depending on the number of cylinders. A $49.95 tuneup at any MP&G; center includes an oil change and new oil filter.
Although each dealer has fixed prices, fees vary from shop to shop because both companies are franchised. Granatelli shuns the idea of franchising, saying he would be afraid of losing his control over dealers.
Fixed prices are solace to some customers. “The dealer isn’t hiding anything,” said Frank Camastro, publisher of Motor magazine, a New York trade publication. “It’s the McDonald’s philosophy for cars.”
But critics of “fast-food garages,” as they call such companies, say consumers are led by advertising to expect more than they can get. They also say the system benefits some customers more than others.
“I’ve seen $10 worth of work and several hundred dollars worth--all for 50 bucks,” said John B. Heyler, a past president of the Automotive Service Council of Southern California, based in Los Angeles. Nationally, the Automotive Service Council represents 5,500 independent repair shops.
“People don’t want a different guy for every part of their car,” Heyler said. “They want a single place where they can develop a relationship and build a trust.”
Granatelli says his profit is limited to $2 per car. But competitors said they estimate Tuneup Masters has higher markups. “Oh, come on,” said Henry A. Savage, vice president for marketing at Econo Lube N Tune. “What’s he talking about? On a lot of cars, he’s just changing plugs.”
Granatelli says he is aiming at expansion, hoping to have 1,000 shops nationwide within five years. Meanwhile, he is concentrating on the Sun Belt, where he says the warm weather makes it cheaper to run garages.
‘Awed’ by Phone Call
Granatelli entered the tuneup business seven years ago, when he bought out Dres’ 18 Tune Masters garages in the Los Angeles area. Of Dres, Granatelli says: “Naturally, he was awed by having Andy Granatelli give him a call. But he acted aloof about it anyway.”
After three years when, Granatelli says, he had 200 stores in six states, he changed the name to Andy Granatelli’s Tuneup Masters. “I didn’t want anybody to think I was using my name. I wanted to do it the hard way,” he said.
Granatelli says he always has done things the hard way. He grew up in Chicago during the Depression, performing curbside repairs with his brothers, Joe and Vince, to help feed the family.
In the late 1940s, the brothers opened their own garage off fashionable Lake Shore Drive. Eventually, they opened an auto parts company, Grancor, which distributed parts nationwide.
Known as a Hot-Rodder
Granatelli says he earned a reputation as a hot-rodder on the highways around Chicago. In 1946, he drove a car built from Grancor parts at Soldier Field. Two years later he was running the hot-rod show there.
In his book, “They Call Me Mister 500,” Granatelli relates how he would stun the crowd by having catsup-coated dummies dropped from speeding ambulances onto the race track. “People thought we were killing drivers like flies,” Granatelli wrote.
Granatelli drove in the Indianapolis 500 only once. It was in 1948, and he crashed in the qualifying rounds. Real fame for Granatelli came as head of STP. In 1969, an STP-sponsored car driven by Mario Andretti won the Indy. Gordon Johncock, in another STP car, won four years later.
Granatelli, who had worked as a consultant to Studebaker-Packard Corp., became president of the company’s chemical compound division in August, 1963. That division’s principal product was STP.
Before the government stepped in, STP was marketed as an oil additive that would “make engine tuneups unnecessary” and “eliminates friction and wear.” In a recent interview, Granatelli said he still believes in the product. But, FTC Chairman Lewis A. Engman said in 1975, “STP oil treatment is of no significant value to the majority of cars which regularly use the proper grade of oil.”
Granatelli built STP through a massive promotional campaign that used the support of racing teams. Advertisements featured him and sometimes his wife, Dolly. The company grew in annual sales from $1.7 million in 1963 to $95.3 million by 1972.
A 1971 article in Consumer Reports prompted the FTC study. Granatelli was deposed from his post with the company months after the Johncock victory. The huge promotional spending program apparently was his downfall. At the time, company directors complained STP was barely breaking even.
STP was acquired in July by Union Carbide. H. J. Hannigan, a Union Carbide automotives manager, said STP has been reformulated since the FTC study and that claims for the product now are that it helps fight the thinning of oil.
