Back in High Gear

When the corporate legacy of racing great Dale Earnhardt was foundering, a seasoned supplier exec stepped in to help

Things were going badly last year for Teresa Earnhardt, the tough-as-nails widow of NASCAR racing legend Dale Earnhardt, and she was looking for a hand in managing the automotive business her late husband left behind.

There was a North Carolina Chevrolet dealership, an ongoing heritage of NASCAR winners, machine shops, high-tech engine research programs and merchandising and licensing agreements for Earnhardt's name. And there were more than 200 employees to consider.

But instead of seeking help from the Charlotte, N.C., community where NASCAR lives and breeds, she turned to Detroit. Specifically, she reached out to one of the biggest names in the U.S. auto industry: John Middlebrook, the recently retired General Motors global sales and marketing chief who spent decades intertwining NASCAR with the brand names of Chevrolet and Pontiac.

"Teresa is my friend," Middlebrook said from his home in Michigan. "And of course, Dale was, too. But I couldn't take that job."

Instead, Middlebrook recommended a Detroit executive who had made a name for himself in the seemingly unrelated world of auto parts suppliers: Jeff Steiner. Steiner had come up through the marketing ranks of seating giant Johnson Controls Inc. He later stepped in to pick up the pieces at American Sunroof Corp. after the death of owner Heinz Prechter.

Middlebrook was so confident Steiner was the right man to help that he traveled with him to Dale Earnhardt Inc. offices in Mooresville, N.C., to bring Steiner and Earnhardt together.

Now, a year and a half later, Steiner is living up to Middlebrook's promise. As executive vice president and general manager under CEO Teresa Earnhardt, Steiner is helping to remake the racing company into a new phenomenon in the industry -- a name-brand NASCAR supplier.

"Being at Johnson Controls all those good years, I can tell everyone it's not so bad being a supplier," said Steiner, 45. "But we're less visible to the fans on ESPN or ABC on Sundays. And people ask, 'Are you guys still open?'

"We absolutely are," he said. "Dale Earnhardt is in racing today, but in a different way than we were in the past. We've shifted more to being a supplier to the industry."

Two new joint ventures now handle the actual competitive racing operations. Earnhardt Ganassi Racing handles drivers Juan Pablo Montoya in his #42 Target-sponsored car and Jamie McMurray in his #1 Bass Pro car. And Earnhardt-Childress Racing Technologies LLC has become the source of engines and technologies for the sport.

Launching tech group

Not long after arriving with his family from Michigan last year, Steiner launched Earnhardt Technologies Group, a supplier of vehicle and parts engineering for racing teams. The business, which has been running seven days a week, supplies engineering services to other teams and also runs a racing gear and transmission leasing business, in addition to parts manufacturing and sales.

The engineering business allows small racing teams to use Earnhardt's advanced driving simulators to evaluate and tune their cars. The simulators recreate the track conditions of every NASCAR venue in the country, and generate a kind of playbook for crew chiefs to prepare their cars.

Steiner now plans to launch a racing incubator operation at company headquarters. Earnhardt will lease low-cost office and garage space to aspiring new teams, providing management support, engineering services and tools, plus support services during races.

Steiner also converted the company's in-house flight service into a charter aviation business, specializing in shuttling NASCAR teams and pit crews to events around the country.

The engineering expertise will cross over into the new-car showroom early next year. The company's store, Dale Earnhardt Chevrolet, in Newton, N.C., will begin retailing a limited-edition Dale Earnhardt performance-package Camaro, developed in-house. Steiner said details of the car will be revealed later. He added that there will be other special programs for the dealership, which has been a stable part of the company through the market downturn.

Compared to the billion-dollar comings and goings of global auto-makers and their megasuppliers, the business of a NASCAR company is modest. Outside estimates put the privately held DEI at about $50 million in annual revenues. Steiner declined to reveal financial data, but acknowledged that business had fallen by about half in 2009 when Teresa Earnhardt called on Detroit for help. He said the past year of restructuring and new ventures has brought it back by the same amount.

Upholding the legacy

Even as he expands the company, Steiner is aware that he is dealing with the legacy of the Elvis Presley of the racing world.

Dale Earnhardt rose to prominence on the mostly Southern NASCAR tracks in the 1970s. By the 1980s he had become the sport's record-setting star and picked up the nickname "The Intimidator" for his aggressive driving moves.

But in February 2001, on the final lap of the Daytona 500, Earnhardt was killed when a collision sent his famous GM Goodwrench-sponsored #3 car into a retaining wall. The tragedy left racing fans across the country mourning along with Earnhardt's family. But it also cast a dark cloud onto Earnhardt Inc.'s future.

Central to the plan of carrying on the family business' name was the career of Dale Earnhardt Jr., Teresa's stepson. But, in a second blow, "Junior" left the family organization in 2007 to drive for rival Hendrick Motorsports.

Still, nearly a decade after his death, Dale Earnhardt Sr. continues to generate a startling market. The Davie-Brown Index, which measures the name recognition of celebrities, found a year ago that 76 percent of Americans know Earnhardt's name, up from 56.6 percent in 2007.

An Earnhardt showroom and gift shop inside company headquarters in Mooresville, visible from the executive windows upstairs, draws about 150 visitors a day. This summer, nine years after Earnhardt's death, his face appeared for the second time on a box of Wheaties.

"We have a legacy to uphold here," Steiner said. "The mission that I have from Teresa is to do everything I can to expand on that legacy."

Steiner admitted he did not follow NASCAR growing up in suburban Detroit. He did follow Indy Car racing, and has dabbled in racing as a hobby.

But when it comes to the business of NASCAR, of racing in general, of auto retailing, parts making or engineering services, "The principles are the same no matter where you are in this industry," Steiner said. "It's strategic planning, knowing who you are and who you're not. I'm applying all the learning I ever received in the supplier business in Detroit to this."

He added: "We feel like we have a unique mission to uphold, which is Teresa's vision.

"Whether we're delivering a new car to a customer or helping a race team with an engine, if the customer doesn't leave us saying, 'I touched Dale Earnhardt today,' we're not doing our job."

You can reach Lindsay Chappell at lchappell@crain.com.