All Systems Roger
The sun still occasionally does set on the Penske empire, an operational flaw its founder and chairman is sure he could fix if he could just buy a piece of the obstinate star, or find a way to assume controlling interest.
Until then, Roger Penske does what he can to outwork the sun, rising before it does, laboring long after it sets, shuttling between time zones on his own jet as he oversees businesses on three continents worth $5 billion--and counting.
The Penske name isn’t quite up there in the McDonald’s-Disney-Nike sensory-overload stratosphere, but it’s getting close.
Take a drive along Interstate 10--Penske laughingly calls it “our used car row”--and you’ll find the signs. (Or, more to the point, they’ll find you). Flip open a newspaper and the logo will chase you down there too.
Penske Jaguar. Penske Toyota. Penske Honda. Penske Cadillac. Penske Lexus. Longo Toyota, Lexus and Motorcars--all owned by Penske. Penske Leasing. Penske Truck Rental. Penske Auto Centers.
That’s only locally, merely a part of the Automotive branch of Penske Corp.
There are also:
* Penske Performance Group, which manages Penske Racing, a venture that has produced 196 victories in major auto races and 10 championships in the Indianapolis 500.
* Penske Transportation Services Group, which includes the Penske-run Detroit Diesel Corp., the Penske Truck Leasing Corp., Penske Logistics and Leaseway Auto Carriers.
* Penske Motorsports Inc., which operates racetracks in Michigan, Pennsylvania, North Carolina and, now, in California, with this weekend’s opening of the California Speedway in Fontana, a $110-million undertaking.
Penske is also co-general partner of a ski facility in Deer Valley, Utah, but--rare missed opportunity here--has yet to come out with his own line of high-performance Penskis.
How far does the empire stretch?
Penske has engine manufacturing plants in Brazil, Italy and Germany, leasing companies in Canada and Mexico, auto centers and car dealerships across the United States, racetracks on both American coasts.
He is big on on-site inspection--”He’s very much hands-on,” says longtime friend and now employee Les Richter--so he spends much of his time on the Penske jet, flying from business to investment to project with potential for a big upside.
Then, to wind down from a hard week’s grind, he flies to that weekend’s CART race, gets down in the pit and runs the Team Penske pit crew.
“That’s my golf game or my hunting trip on a weekend,” Penske says. “I love to be down in the pits, running one of the race cars. It’s kind of like coaching a football team. You get to make the call, you can make a difference. It keeps you sharp, it keeps you focused.”
Penske’s son, Greg, who runs the family automotive group and is chief executive officer of California Speedway, estimates his father flies more than 600 hours a year.
“In Southern California, the car is our mode of transportation. The plane is his,” Greg said. “He’s in the air like everybody else commutes to work.”
A typical week in the life of Roger Penske has been the one leading up to the inaugural California 500.
Tuesday, June 10: Germany for business meetings.
Wednesday, June 11: Back to Detroit.
Thursday, June 12: Fly to Southern California, inspect progress at California Speedway.
Last Saturday: Back to Detroit for the Detroit Grand Prix to kick back in the pits.
Tuesday: Back to Southern California to complete preparations for the California 500.
It is a schedule that would exhaust a man of 30, let alone a 60-year-old grandfather with hair the same shade as whitewalls.
“I can’t say where he gets his energy,” Greg Penske says. “The guy’s an amazing person. He can go 24 hours straight and still keep his focus.”
Penske typically begins his day at 5:30 or 6 in the morning, makes a few rounds of international phone calls, works out for 45 minutes, is in the office by 8 and puts in a 12-hour day, he says almost apologetically, making sure to add, “But I work on weekends too.”
Racing and business rivals have accused Penske of sandbagging when he outlines his daily agenda.
They suggest the man never sleeps.
“Oh, I sleep,” Penske says. “I can sleep anywhere.”
In planes, trains or chauffeur-driven automobiles.
“I don’t need a lot of sleep,” he says. “I guess that my intrigue is the next opportunity, the next decision we have to make, the next challenge. It keeps you going. It keeps you young.”
*
The seeds of the empire were sown in 1964, when Penske, Sports Illustrated’s driver of the year in 1961, retired from sports-car racing to devote more time to what had been a moonlight until then, the general managership of a Chevrolet dealership in Philadelphia.
Penske was only 27 when he retired from driving.
“I thought I could make a lot more money as a businessman than I could as a racer,” he says.
He laughs.
“But today you look around. I could have been wrong.”
In 1965, Penske bought that Chevrolet dealership, and in 1969, he purchased a small truck-leasing business in Reading, Pa. No longer was Penske simply selling cars--he was stepping out into the “transportation services” business.
Richter, now the executive vice president of California Speedway, remembers having dinner with Penske in a Detroit restaurant about that time, when he asked Penske, “What are your plans? What are you going to do now?”
Penske grabbed the daily special card that was on the table and began to write on the back--”I’m going to do this, I’m going to do that.”
“I kept that card,” Richter says. “If I pulled it out right now, I could show the outline of Penske Corp. as it stands today.
“He wrote that he was going to take over Reading Trucking, he was going to buy some more dealerships, he was looking into buying Michigan Speedway.
“I said, ‘You’re going to do all that?’ And he said, ‘Yeah.’
“You look back today and he’s done all of it. He has that kind of vision.”
Dick Simon, founder and former owner of Dick Simon Racing, raced against Penske cars for nearly three decades and joined Penske as a member of the CART board of directors. Simon uses the same words--vision, anticipation--when discussing the strengths of his longtime rival.
“Roger Penske is one of the most competitive people I have ever met,” Simon says. “He’s so competitive that he’s so far out in front of everybody else--sometimes two years ahead of the pack.
“On the CART board, he’d propose things, looking two years down the road, and some of the other owners would completely miss the point. With Roger you always had to be on your toes.”
Simon recalls one such Penske proposition, when Penske lobbied the board to lower the boost in turbocharged racing engines in order to slow the cars--purportedly for safety reasons.
“The average board member went along with it and voted to safely lower the boost,” Simon says. “But Roger, I’m sure, knew that his cars had Chevy engines and Chevy engines had a better compression ratio than the Cosworth engine. The Cosworth was already at maximum compression, the Chevy wasn’t.
“The engines had approximately the same power, but by lowering the boosting pressure, you created a situation where the Chevy was at a big advantage. It took two years for Cosworth to redesign their engine.
“And those two years, the Penske team had a very strong run.”
Penske also has profited by knowing when and where to take a risk. Two current cornerstones of Penske Corp. are Detroit Diesel and Penske Truck Leasing Corp. (formerly the Hertz Truck Division)--both onetime floundering companies Penske took over and turned around.
Hertz Trucking, according to Penske, was losing “about $4 million a month,” when he bought into the company in 1982, eventually turning a profit and buying out Hertz in 1988. Also in 1988, Penske bought Detroit Diesel from General Motors after the company had lost $600 million between 1983 and 1987.
In 1994, Detroit Diesel reported a profit of $36.1 million.
“I love the transaction,” Penske says. “That could be a racing transaction, like winning a race, or selling an engine or renting a truck.
“I have in the past been really involved in businesses that needed help or needed someone to rally the troops and not be afraid to make decisions. . . . I guess I like being in that position. I like being at risk.”
But not uncalculated risks. As Penske concedes, he was able to “partner with” RCA in taking over Hertz Trucking and again with General Motors in the case of Detroit Diesel.
“They were looking for exit strategies in both of those cases,” Penske says. “I guess the credibility I had as a businessperson gave me the opportunity to get in the driver’s seat.”
No pun intended.
Racing allusions pop up in Penske’s business-speak all the time. He frequently talks about staying ahead of the competition, never looking back, staying focused and intense for fear someone might pass you.
“I always say that in racing, no one tells you to go faster,” Penske says. “You’ve got to go do it on your own. You’ve got to make it happen. It’s the same way in the business world.”
And that why Penske continues to run and run. And when he isn’t running, he’s flying.
Penske sounds like a man in serious need of a hobby that doesn’t entail exhaust fumes, and he insists he has some.
“I like to play golf,” he claims. “And I like to ski. I like to be out on the water, diving, water-skiing. Someday, I’d like to live on a boat.”
Assuming, of course, the boat is equipped with three phone lines, fax, Internet access and a stock market ticker.
“He has a boat and he plays golf,” Richter confirms. “But I know what he really likes to do. Work.”
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Today’s Schedule
* 7 a.m.: NASCAR Winston Cup registration and inspection.
* 7:30 a.m.: California Speedway ribbon-cutting ceremony.
* 8:30 a.m.: IROC practice.
* 9 a.m.: NASCAR Winston West practice.
* 9:30 a.m.: NASCAR Winston Cup drawing for Busch pole qualifying.
* 10 a.m.: NASCAR Winston Cup practice.
* Noon: Winston West qualifying (all positions, one lap).
* 1 p.m.: NASCAR Winston Cup practice.
* 2 p.m.: IROC practice.
* 3 p.m.: Winston Cup pole qualifying (positions 1-25, one lap), followed by final NASCAR Winston West and IROC practice (half-hour each).
