If Michael Jordan - arguably the world's most famous athlete - bought the Chicago Bulls, founded a rival league, launched a basketball manufacturer, revived a struggling network, then added a speculative investment business that snapped up smaller sports-business ventures such as apparel makers and fitness centers, all the while accumulating board seats, the dictionary would strain to supply enough superlatives.
Yet His Airness simply would be following a road driven the past 40 years by Roger Penske.
In the beginning, Penske was an aluminum salesman and car dealer who worked weekends to become a promising star of early-1960s auto racing, a sport of interest to few outside the South.
Today, his empire and his name are global. The sun never really sets on Detroit-based Penske Corp.
On the strength of his ability to repair cast-off, money-losing operations from some of the world's largest corporations, Penske has created a company that expects $10 billion in revenue for 1999, with an end-to-end integration of the automotive and transportation industries. The repairing, an ability he has displayed since he worked on cars as a teen, ties in well with his tenacious work ethic and meticulous attention to detail. Along the way, he has played his racing card wisely and has built up admirers on Wall Street, on his always-clean plant floors and in some of the world's most powerful boardrooms.
The fact is, if you drive a car or a truck, Penske probably had a hand in there somewhere.
From designing engine technology (Diesel Technology Co.) to building engines (Detroit Diesel Corp.) to shipping parts (Penske Truck Leasing Co. and Penske Logistics) or shipping cars (Leaseway Auto Carriers) to selling the cars (hundreds of Penske dealerships) or fixing them later (Penske Auto Centers Inc.) - Penske's fingerprints are all over the automotive and transportation industries.
He controls one of the country's largest car-service chains, the second-largest car-dealership chain, second-largest truck-rental company, third-largest heavy-duty diesel-engine maker and what is probably its best-known racing team. Penske often ties the businesses together, leveraging them to advance one another. He also sits on the boards of directors of the nation's fifth-largest company (General Electric Co.), the world's largest auto supplier (Delphi Automotive Systems Corp.) and the nation's largest motorsports company (International Speedway Corp.).
Penske Corp. employs more than 33,000 people on six continents. It is among the largest privately held companies in the nation. Penske Corp. controls significant stakes in three public companies: Detroit Diesel, UnitedAuto Group Inc. and International Speedway.
Penske is the name behind Penske Capital Partners LLC, a New York investment venture backed by Chase Manhattan Corp., GE Capital Corp. and Aon Corp.
Although he remains best known for the four-year racing career that built his 'brand,' ultimately, he is and always has been a businessman.
In assembling Penske Corp., Penske simply has continued to do what he did in high school: fix things.
As a teen-age car nut, Penske would buy cheap used cars and fix them up. One would think he would drive or race those cars proudly around town. Instead, he sold them for more money.
He would use the profits to buy another car, one slightly more expensive than the one before, with slightly greater profit potential.
He repeated this process about 30 times through high school and into his mid-20s. Today, it probably would be called 'value-added servicing' or some such thing. Back then, it was just Roger making money.
'All that buying, selling and fixing of cars - that's when Roger's mother said she knew he would be something different, something special,' said David Atlas, a Red Bank, N.J., motorsports attorney who worked for Penske from 1979 to 1986.
Penske's repair jobs are far from over. His racing team has been suffering a losing streak, stock in two of Penske's publicly traded companies is languishing and Penske Auto Centers has not met expectations. In fact, Penske, in 1998, removed his son Roger Jr. from the auto center's top post in what he called his 'toughest day in business.'
But Penske's track record speaks for itself. Even his first venture, race-car driving, needed a lot of fixing when Penske entered it in the late 1950s. Today, it is a multibillion-dollar industry with a sponsorship panache other sports envy.
'He's like an American success story,' said William France, CEO of International Speedway, which became the country's largest motorsports company when it acquired Penske Motorsports Inc. last year.
'Roger started with a dealership, just this one dealership, and he has built this transportation giant,' France said. 'He has set an amazing pace to do it. He'll eat dinner in Stuttgart, fly back to Detroit during the night, be in the plant at 7 a.m. to meet someone, and then fly to Rio at 3 p.m. to look at a new plant. Not many people can do that.'
Here's a history of how Roger Penske did.
Born Feb. 20, 1937, in the well-to-do Cleveland suburb of Shaker Heights, Penske was the son of Jay and Martha Penske. His father was a vice president of a large metal-warehousing company.
Even as a child, Roger Penske was considered unusually diligent. At age 10, he asked his dad for a bike - which his father easily could afford - and was told to come up with half himself.
Penske was a newspaper carrier for the Cleveland News at the time. The newspaper soon after held a contest in which carriers could win bikes if they added 20 new customers. Penske got 40.
'My parents took me over to a trailer park where I could knock on a bunch of doors quickly to generate sales to get a bike,' Penske said in an interview. 'I've just always worked. As a kid, I'd work on holidays and Saturdays. That's the work ethic I have today.
'I don't have an alarm clock that goes off in the morning, or at night, to say the day is over. We do what it takes, as long as it takes. That has really been my schedule for as long as I remember.'
Other executives marvel at Penske's 'normal' schedule. Of the more than 20 people contacted for this article, almost everyone had at least one story about Penske's legendary work ethic.
Penske said he likes to start most days at 5: 30 a.m., exercise three days a week, and then work well into the evening, day after day after day.
Managers said that if Penske is visiting a site, even at midnight, it's probably a good idea for the employees to stick around.
'Hours of work and time required just aren't barriers to Roger,' said Walter Czarnecki, a Penske Corp. executive vice president who has known Penske for nearly 30 years. 'He focuses on an objective, creates a plan and will let nothing stand in the way. Not hours of work. Not time. He's prepared to put in whatever amount of time and undivided attention to get things done.'
After winning the bike, Penske continued to work that paper route for years. He bought a motorbike at age 14, when the route got too big. That motorbike, combined with frequent visits to Sportsman's Park in Akron, hooked Penske on racing.
At age 16, Penske was hurt riding a motorcycle, crushing his right ankle. He told Sports Illustrated in 1963 that doctors considered amputating his foot, but after he had spent 12 weeks in the hospital, the foot was saved.
He reported for Shaker Heights High's football team the following year and made the team as a defensive end.
Penske began racing as a college student at Lehigh University near Allentown, Pa., in the late 1950s. His car of choice was a 1957 Corvette.
He graduated from Lehigh in 1959 with a bachelor's degree in industrial management. His first job out of school was selling aluminum for Alcoa Inc. of Pittsburgh, but on the side he was emerging as an internationally heralded race-car driver.
While at Lehigh, Penske continued to repair cars, working at a nearby garage between classes and at night.
A fraternity brother of Penske's told Sports Illustrated that Penske, even then, was shooting to make 'Penske' a name that meant something.
' `There goes Roger Penske.' He wanted people to say that. `He has done thus and so,' ' said Bruce Crichton, who roomed with Penske at the Phi Gamma Delta house. 'He wanted to be tops. He liked to be the center of things. He was never a sit-down-and-have-a-long-chat type guy.'
By the early 1960s, Penske was among racing's top drivers, competing in sports car, endurance and Formula One events. He won his first major event in 1962 and was named driver of the year by Sports Illustrated, The New York Times and the Los Angeles Times.
He also set a record in 1962 for one-year winnings, pulling down $32,350.
'He was just the perfect combination of what you wanted in a driver,' said Atlas, who, since leaving Penske, has represented drivers such as Al Unser Jr.
'He was a world-class athlete in racing and just a genius in business. Even at age 20, he knew what he wanted. At age 22, he'd have his pressed pants and polished shoes and was the first guy to bring bankers and potential sponsors down to the tracks. That was rare. There weren't a lot of people in pressed pants down at the races.'
Penske was criticized in the early 1960s for building a hybrid sports car/Formula One car that competitors said bent the rules for mandated car designs. He'd hear similar criticisms 20 years later when Team Penske was dominating IndyCar racing.
The accolades poured in, even though racing remained just a part-time activity. Besides selling aluminum, he sold cars for a Chevrolet dealership in Philadelphia.
Always on the lookout for business connections, he sold a Corvette to a senior vice president at Sun Oil Co. He mentioned to the executive that he was racing and needed sponsorship.
That conversation, which eventually led to Sunoco becoming an 18-year sponsor for Penske Racing, was duplicated often in Penske's career.
He often forged relationships with people who would help him in business and give him a chance to prove his worth. Executives at GM were another example.
'I also did some driving for them, some test driving on the Corvair during the problems, lawsuits they had with (Ralph) Nader,' Penske said. 'That really gave me an opportunity to meet some people from Chevrolet.'
Those Chevy connections made through racing would, ironically, lead to Penske's exit from the sport in March 1965.
On the top of his game, he quit. The reason was simple - business.
A new career
While working at the Chevy dealership in Philadelphia, he decided to buy an interest in it.
For years, he'd been wondering how long to stay in racing, and Alcoa had been pushing him to get out for some time.
'The banks basically said to him, `Make a choice. Business or racing,' ' Atlas said. 'He chose business.'
It was not a decision Penske, then 28, agonized over.
'It was a very easy decision to make,' he said. 'I couldn't get insurance as a racer, so I had to quit. It was simply a business decision. I never thought about racing myself again.'
The ability to make such quick decisions is another Penske hallmark.
'He's very bottom-line oriented,' said Derrick Walker, who helped run Penske's racing team from 1975 to 1988 and now owns a rival racing team, Walker Racing. 'That's what matters. He doesn't much like the bull - and the politics. He makes decisions and sticks to them.'
'He's very hard-charging, very driving, a real capitalist,' said Timothy Leuliette, a board member with Penske Corp. who left the company last summer after three years as Penske Corp. president. Leuliette is now president of Heartland Industrial Partners, a Bloomfield Hills, Mich., investment fund launched by former Reagan budget guru David Stockman.
'Roger just gets things done,' Leuliette said. 'He's not about pomp and circumstance. I wasn't there very long when he and I were out unloading pumps from a truck. Why? Because it had to get done. If, after a race, you're on the parade lap enjoying yourself, he'll say, `Get out of the way; there is work to be done.' '
With racing behind him, Penske took to expanding his business. He bought the entire Penske-McKean dealership in 1965, in part with a $150,000 loan from his father. As the dealership grew, Penske ventured into other businesses and made important contacts. At a dealership conference in Montreal around 1967, he struck up a friendship with a conference speaker, Patrick Ryan Jr., who later would become CEO of Aon, a Chicago insurance company with nearly $7 billion in annual revenue.
'He came up to me and immediately seemed quite dynamic, very enthusiastic,' said Ryan, who invested in Penske's ventures in the late 1960s and still owns a percentage of Penske Corp.
'He had the dealerships, but was quickly expanding into other things. He soon had a lot of smaller businesses but later made the decision to get into much larger things.'
To get into larger businesses, Penske continually befriended or partnered with key people or companies.
'He was this private company without capital, so he partnered with those that had capital, like GM and GE,' Ryan said. 'He chose his partners well, but it's not easy. He had to prove his worth to them along the way.'
Penske said he learned early on that he was better off with a smaller piece of a company backed by a larger corporation than with a larger piece of a company that had no corporate backer.
'These large partners can do a lot for you,' Penske said. 'You develop your name while working with them. Along the way we've developed pretty strong relationships with Hertz, GM, GE, DaimlerChrysler and Ford Motor, to pick a few.'
In 1969, his company began to take shape. Penske Corp. was formed as a holding company to oversee his newer acquisitions: two racing-tire distributorships (Competition Tire East and Competition Tire Midwest) and a small Northeastern truck-leasing company with sales of about $1 million.
Sitting in a restaurant in Detroit around that time, Penske scribbled out on the back of the daily special card his vision of the company he wanted to create and showed it to a colleague named Les Richter.
'I'd be less than fair to say I knew how all this would work out 25 years ago,' Penske said. 'I just went into areas where I had knowledge or we had some leverage because of another business.'
Although it was a tiny company, the leasing business was important because it led Penske into trucking and a part of the shipping business known as logistics. Logistics, commonly defined as the movement of a product or material from one place to another, has become an enormous issue in manufacturing as the concept of just-in-time delivery has expanded.
Today, Penske Truck Leasing Co. of Reading, Pa., has $2.5 billion in sales, making it the world's second-largest trucking company. One of its divisions, Penske Logistics, has annual sales of around $625 million and recently signed lucrative logistics contracts with Ford Motor Co., Whirlpool Corp. and Rite Aid Corp.
'That's an example of Roger being five or six years ahead of everyone,' said Richard E. Dauch, the American Axle & Manufacturing Inc. chairman who met Penske in the early 1970s when Dauch was working for Chevrolet. 'He has the vision to see where things are evolving and going.'
Years later, Penske would introduce Dauch to Lee Iacocca, leading to a 12-year career Dauch would have with Chrysler Corp. Penske had met Iacocca through the years, and both were graduates of Lehigh. Iacocca thought so much of Penske that when Iacocca was planning his retirement, he asked Penske if he'd be Iacocca's successor at Chrysler. Penske ultimately declined, saying, 'My place is with my company.'
'He is one of the five most brilliant people I've ever met. He's got the gray matter here,' said Dauch, tapping the side of his head, 'but he's also a competitive cuss. I tell you, he does not like to finish second.'
As Penske Corp. was emerging, Roger Penske moved back into Indy racing, this time as the most successful owner the sport had ever seen.
Back to the track
He came back with an entity known as Penske Racing and a plan to use technology and marketing in a way unique to racing. He would raise money from sponsors, use the money to invest in automotive technology, then win. That, in turn, would bring in more sponsors.
Along the way, Penske also wanted to improve racing's image and attract female viewers. It would help the sport and almost certainly help the sport's best teams, such as his.
Early on, there were jokes about his team because they showed up with matching shirts and crew cuts and maintained spotless work areas.
'You could, and still can, eat off the floors of his racing work areas,' International Speedway's France said.
Penske, who later got the nickname 'The Captain,' would see his team laughed at by rivals and called 'college boys.'
The snickers ended when his team won the 1972 Indianapolis 500. It would be the first of 10 Indy 500 wins, the most by any racing team.
Penske later moved successfully into NASCAR, with well-known drivers such as Rusty Wallace.
Penske Racing team became a bit like the New York Yankees of auto racing; however, in a cruel bit of irony common to both business and sports, Penske's Indy dominance has lagged of late as rivals have copied his methods and taken his top people.
'It's been disastrous for him the past few years. Just very bad.' said Walker, who admits he did not leave on good terms with Penske. 'His racing team has more resources than anyone, yet they've not been successful.
'He doesn't like it when people leave. He expects you to stay forever. ... I still expect him to turn it around. He wants to win too much not to.'
As his racing team grew, Penske looked to expand beyond the East Coast, where most of his operations were based. He made his first move into the Detroit area in 1970, when he bought a Chevrolet dealership in Southfield, Mich.
A key move was his acquisition in 1973 of the bankrupt Michigan International Speedway for $2.5 million. Like later Penske purchases - Hertz Truck Leasing, Detroit Diesel Corp. and Kmart's auto-care centers - Michigan International Speedway was bleeding money. Penske and Czarnecki quickly turned around the track, which had 26,000 seats at the time. Today, it has 106,000.
Michigan International Speed-way, along with racetracks in Nazareth, Pa., and Los Angeles, would be the foundation for Penske Motorsports, which went public in 1996 with revenue of $55.2 million. Penske Corp. sold that business to International Speedway last May for $610 million, creating a $350 million a year player in the motorsports business. Penske Corp. now owns 8.6 percent of International Speedway and is its second-largest shareholder.
As the 1970s moved on, Penske Corp. became less of a racing company.
In 1975, Penske took over a Detroit Diesel Allison distribution operation in New Jersey, creating a company called Penske GM Power in the process.
Penske sold his Chevrolet dealership in Southfield to Czarnecki because GM prohibited a company from owning both Detroit Diesel and car dealerships. Czarnecki sold the dealership to Joe Panian in 1978, when he came back to Penske Corp. to help with a second Detroit Diesel distributorship, this one in Pennsylvania.
During this period, Wall Street brokers approached Penske about taking Penske Corp. public to raise money for more deals.
As the possibility of going public was explored, the market softened and Penske found another financial backer, Gould Inc., an electronics firm in suburban Chicago that was later acquired by Nippon Mining Co.
Gould CEO William Ylvisaker was a Penske guest at the Indianapolis 500 one year, and later Gould acquired 20.9 percent of Penske Corp. to help the company with new and future deals. Again, a key relationship helped push Penske Corp. ahead. Penske Corp. repurchased Gould's stake in the mid-1980s. Penske Corp. remains private, though it maintains significant ownership in public companies such as Detroit Diesel and International Speedway. Penske owns 57 percent of Penske Corp. Other owners include Ryan and Czarnecki.
By the late 1970s and into the early 1980s, trucking was becoming a larger part of Penske Corp. Penske Leasing, as the trucking business was called, had 33 rental locations by 1981.
In 1982, Penske got a call from a top Hertz trucking executive. Hertz had a truck-leasing unit with $200 million in revenue that was losing more than $2 million a month.
Said Atlas: 'This guy called and said, `You've got this trucking business, right, Roger?' He said, `Yes, I do.' Then the guy said, `So, do you make money on it?' Roger said, `Of course. I wouldn't do it if we didn't make money.' That was when Hertz became a partner with us.'
Penske Corp. became a 35 percent owner and gained management control of Hertz Trucking, which would then be known as Hertz-Penske Truck Leasing. To help fund the deal, Penske Corp. sold other businesses, including the Pennsylvania diesel distributorship, which had sales of $25 million. In June 1983, Penske Corp. sold a tank-trailer manufacturing and retail business plus Penske Power Systems, an industrial gas turbine operation in Ohio.
Penske's passionate work ethic kicked in with the Hertz acquisition. Over three months, Penske visited every Hertz Truck Leasing operation, all 100-plus of them.
'He'd get on a plane at 7 a.m. and fly all day, visiting two or three sites a day, do it until midnight,' Atlas said. 'He'd fly into Topeka, Kan., meet the managers and the grease monkeys. He had these former Vietnam vets doing the flying because they'd fly all night, into anywhere, at any time, for him. Then, when he could, he'd call the CEO of every company he knew and ask them if they'd give his new trucking company a shot. A lot of them did.'
Today, Penske Corp. owns at least three corporate jets. Penske said he logs 500 to 600 hours in the air each year.
Many of the Hertz locations were closed and 25 percent of the work force was laid off. But a year later, the operation showed a profit of $1.2 million and was growing rapidly. The trucking operation sales topped $500 million by 1986. In 1988, Hertz was out of the partnership, and it was just Penske Truck Leasing.
GE Capital invested in the trucking operation in 1988 and today owns 79 percent of the company. Penske Corp. owns the rest.
Penske Trucking is second only behind Ryder in the truck-leasing business. It has 650 locations across North America and operates more than 130,000 vehicles.
Hertz's departure in 1988 was the first time Roger Penske said he realized his last name was something more than, well, just his last name.
'I guess I didn't understand or realize, really, what kind of brand we were generating until we did some market studies,' he said. 'We had a 10-year licensing agreement to use the Hertz name, and we had to make a decision whether we should pay a license fee or use the Penske name.
'Ironically, our studies showed people had just as good recall of the Penske brand name.'
Back to Detroit
In 1988, the same year Penske's name was emblazoned alone on thousands of trucks across North America, GM executives would come calling on the man they'd gotten into the dealership business 25 years earlier. GM's diesel-engine business, known as the Detroit Diesel Allison division, had long been a stodgy, sluggish, money-losing operation plagued with union problems. It had lost a combined $600 million the previous five years.
Other companies, such as Deere & Co., had talked with GM, but nothing stuck until Penske.
GM sold Penske Corp. 60 percent of the business for about $50 million. General Motors Acceptance Corp. loaned Detroit Diesel more than $115 million to fund the operation. Penske Corp.'s ownership grew to 80 percent before Detroit Diesel went public in 1993.
Today, Penske Corp. owns 45.4 percent of the company.
When Penske bought into Detroit Diesel, the company had annual revenue of $842 million and 3.5 percent of the heavy-duty engine market. Annual sales now exceed $2.2 billion, and it has 27 percent of the market.
One of Penske's first moves was to meet with top UAW officials representing the 1,460 workers then at Detroit Diesel. Another early move was to lay off 440 salaried workers and motivate a sales force 'that expected the phone to ring for business,' Penske said. 'They forgot you have to make the phone ring.'
He quickly won over the unions.
'That Christmas, when we came back from vacation, he came in to meet us and said, `I need your help to make this work, to keep it alive,' ' said Jim Brown, chairman of UAW Local 163 in Detroit, which represents about 2,000 workers at Detroit Diesel.
'He met with almost every guy and answered their questions. Those that he couldn't, he wrote down ... and sent them a letter later answering it.
'We'd been asking GM for say-so in the business. GM said no. They were the corporation; we were the union. Roger said, `OK, here's 50 percent say-so. Now help me.' He has been first-class with us all the way.'
Penske walked the plant floor, pointing out things to fix. He asked workers to take down lewd pictures. He spent $700,000 to update the employee cafeteria, and, in the early 1990s, spent $7 million for a fitness center with licensed trainers and nutritionists, which workers and their families can use.
Penske then moved his headquarters to Detroit from New Jersey.
As he likes to do with new acquisitions, Penske worked 20-hour days for three months cajoling potential customers for new sales and using ties from his most recent success story, trucking, to create a new success story. He asked Penske Trucking customers to try trucks equipped with Detroit Diesel engines to compare the gas mileage.
As he had with top executives, Penske used racing to smooth UAW relations, holding a free race day at Michigan International Speedway for Detroit Diesel employees and their immediate families. Those race days continue.
Detroit Diesel was profitable its first two years under Penske. It lost $8.1 million in 1990-91, but then netted $10.5 million in 1992. It went public in 1993 and has posted a profit every year since, including $29.9 million in 1997 and $28 million in 1998. Through three quarters of 1999, it had net income of $37.2 million, on pace to be the company's most profitable year.
Not all has been rosy with the company. In 1998, the EPA fined Detroit Diesel $80 million for selling engines the agency said evaded the Clean Air Act. The fine was one of the largest in EPA history. Detroit Diesel's stock price languishes just above $18, and the company needs to find a home for its V-6 Delta engine, which does not yet have a customer.
Penske's other big move in the 1980s was out West. In 1985, he bought Longo Toyota in Southern California. It was the foundation for the Penske Automotive Group, a California chain of six dealerships with 1998 sales around $1 billion.
Overseen by Gregory Penske, one of two sons from Penske's first marriage, Penske Auto is the 10th-largest dealership chain in the United States.
His toughest day
Ironically, Penske's move into what he did well as a teen-ager - repairing cars - was the cause of his trickiest turnaround and self-described 'toughest day in business.'
In 1995, Penske Corp. purchased Kmart Corp.'s 860 auto-service centers for $112 million. The centers had lost $12 million on sales of $360 million the previous year.
Penske plucked his 36-year-old son, Roger Jr., from Florida, where he was executive vice president of a Detroit Diesel distributorship, and named him CEO of the auto centers.
At the time, Penske Sr. talked of doubling that business within two years. It hasn't worked out. Sales today are around $300 million, and Penske Auto Centers is down to about 660 stores.
Penske said there were struggles from the beginning. The auto-service centers had not been a priority for Kmart. As a division pulled from a larger company, the centers lacked central functions, such as human resources.
By 1998, Penske decided he had underestimated the problems at the stores and overestimated his ability, plus that of his son and other auto-center executives.
'We didn't realize what we were trying to undertake,' Penske said. 'We needed to step back. I can't blame anyone else. I have to take the heat for not getting the job done.'
He made the decision to replace Roger Jr.
'You know, one of the toughest days in my business career was when I had to go see my son Roger and say, `Look, I'm going to have to make a change and take you out as the president.' It's pretty tough to do when you were the one who put your son in,' said Penske, who, in 1998, named former Pennzoil Co. executive Jim Wheat CEO of Penske Auto Centers.
'He (Roger Jr.) went in and put in all the faith and effort that he thought he'd need to run the business. He'd been successful in our other businesses. He took it on because his father wanted him to take it on, and certainly, he put in the time and effort. But we just didn't have the retail experience that it took to run places where you have $6.50-an-hour labor.
'As I told him, you'll look back eventually and say, `That was a great, maturing part of my business career.' Maybe it was just a stop he had to make. We all have those failures.'
The late 1990s also were harsh to Penske Racing. While 'The Captain' had been building his other businesses, he remained committed to racing. Drivers such as Rick Mears, Danny Sullivan, Emerson Fittipaldi and Unser Jr. drove Penske cars to Indy 500 wins; Unser was the driver in the team's 10th Indianapolis 500 win in 1994.
But the following year, Penske's team didn't qualify for the Indy 500 and hasn't been back since because of a dispute between the Penske-led CART group and the Indy Racing League faction that oversees the Indy 500. The dispute basically comes down to Indy Racing League rules that cap equipment costs and creates slower engines, a philosophy that clashes with Penske's philosophy to spend what it takes to win.
THE FINANCIAL WORLD
Now well tied into most automaker and transportation-related companies in the world, Penske is making inroads into the financial community.
In June 1997, he launched Penske Capital Partners. Originally, it was just Chase Capital Partners and Penske Corp., but previous partners GE Capital and Aon signed on later that year. Penske Corp. owns 30 percent.
Penske is a partner in the fund with James Hislop, a former Merrill Lynch & Co. managing director who is CEO of the partnership, and former Mercedes-Benz AG Chairman Helmut Werner.
'Chase has fared well with Roger Penske,' Hislop said. 'Investors in Penske Motorsports fared very well, while Detroit Diesel has been more difficult. On the balance, investors say Roger is someone who `gives me a straight story and optimizes value.' He sits down with analysts or a Moody's (Investors Service Inc.), knows the details and has worked harder on that than you. That gets investors' attention.'
Said Czarnecki: 'He likes to put the deals together more than anything. It's his first love - the hunt, the chase, the structure, then the execution.'
Penske refused to pick his 'favorite' business, but later in the interview, he called Penske Capital just that.
'Penske Capital puts Roger at the epicenter of auto deals,' said Leo Leitner, managing director of investment banking at First Union Corp., which has helped Penske Corp. finance various parts of the business.
'He gets a lot of calls about deals. This is a platform for all the opportunities he sees and gets approached with.'
Penske is chairman of the fund, which has $325 million in assets. It is focused on transportation and transportation services. Previous purchases include Truck-Lite Co., a Falconer, N.Y., truck light maker; and HAC Group, a Wynne-wood, Pa., auto-dealer consulting business.
Penske, ever the master of weaving one operation in with another, uses Truck-Lite to provide equipment to Penske Truck Leasing and Detroit Diesel.
Penske Capital's biggest deal was its $83 million investment last April in United Auto Group Inc., a struggling car-dealer chain with 104 sites in 16 states and Puerto Rico that has a projected 1999 revenue of $4 billion. That deal prompted several calls from car dealers looking to sell, Penske said.
UnitedAuto Group was marginally profitable, but its stock had fallen 40 percent in the previous year. Penske has visited or likely will visit each UnitedAuto Group site, meeting with dealers, service managers, parts managers and others, looking for ways to improve the chain.
On a recent day, Penske spent 12-14 hours in Atlanta meeting with four dealerships to review business plans. He flew home at midnight and met the next morning with executives from Porsche Cars North America in Detroit.
'Those are days I love, where you can talk to a lot of different people and get their ideas which had never been brought to the level of a CEO of their company,' Penske said.
WHAT ABOUT RETIREMENT?
As in the case of any company named after and built by a high-profile individual, there are questions about what happens to Penske Corp. when there is no Roger Penske. His efforts have made the name 'Penske' mean something in the auto industry, perhaps in the way 'Martha Stewart' and 'Ralph Lauren' do in their respective industries. His name also means people now come to him with deals. He no longer has to chase them down.
Automotive analysts once speculated that Leuliette, 49, might be an heir apparent, but he left last year.
Penske's second son, Gregory, has been running the Penske Auto operations for a number of years, as well as serving on the board of directors at International Speed-way and Penske Corp., and potentially could take over Penske Corp.
Roger Penske Jr. now runs a Toyota dealership in California and also sits on Penske Corp.'s board. Three other Penske children, two sons and a daughter from a second marriage, are in college.
Penske stepped down as CEO of Detroit Diesel last summer, turning over those duties to President Chip McClure, 46, a former John-son Controls Inc. president who has been with Detroit Diesel since 1997. Penske remains chairman of Detroit Diesel and Penske Transportation and is Detroit Diesel's largest shareholder, owning 45.4 percent.
To the surprise of no one, the word 'retirement' doesn't mean much to Penske. Despite the snow-white hair and pictures of grandkids in his sparse office, he doesn't even consider retiring, or slowing down. He's looking forward now to how the Internet can be brought in Penske Corp.
'The Internet is very intriguing for us,' he said. 'We want to take our brand and transportation network and create a very profitable Internet company.'
Penske said he does like to relax. He cites golfing, boating and skiing as hobbies and is building a family home on Nantucket Island. But what he really likes to do is work.
'More and more, I hear all these guys my age going to Florida and buying a boat,' Penske said. 'I like to go boating ... but I just don't see that in my horizon. I guess that I want to be able to sit behind my desk on my last day, somewhere in my companies. I may not be worth much then, but hopefully, they'll have a spot for me where I can park my car and a desk that I can sit behind.'