Details Emerge About Shelby Severing Ties With Unique Performance Page 2

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Plagued by lawsuits, an angry Carroll Shelby says he will cancel a licensing agreement with a company that has fallen far behind on customer orders for vintage Shelby Mustangs.

The 84-year-old sports car hero says the company, Unique Performance Inc., has taken millions of dollars in deposits for cars bearing his name. But some customers have been waiting for more than two years for their vehicles, and several have filed lawsuits.

At least 10 customers have sued Unique Performance. And Shelby Automobiles Inc. also has been named as a defendant in suits.

"We've been sued by numerous people," Carroll Shelby told Automotive News. "We cannot continue to accept excuses."

Shelby is engaged in a war of words with Douglas Hasty, Unique Performance's CEO, who says Shelby's operations are mostly to blame for the problem. Hasty says faulty engines supplied by Shelby Automobiles contributed to the production delays.

Since 2002, Unique Performance has partnered with Shelby to re-engineer and refurbish 1960s vintage Shelby Mustangs that range in price from just under $100,000 to more than $200,000.

Customers complain that Unique, headquartered near Dallas, has taken nearly $7 million in deposits but has a backlog of 50 to 60 orders going back to 2005. Hasty admits to the problems but points a finger at the Shelby camp.

"Production delays with the vintage vehicle lines stem back to problems with Shelby 427FE engines supplied by our vendor dating back to August 2005," Hasty wrote in an e-mail to Automotive News.

Overheated
He said engines in the Shelby Super Snake, a special performance version of the Mustang GT500, were plagued by overheating that in some cases caused them to fail. Hasty wrote that the problems have been "resolved" but put his company behind schedule.

"Twenty-eight of the 42 Shelby Super Snakes produced prior to August 2006 experienced engine issues that led to overheating and/or mechanical failure," he wrote. "Resources required for addressing the Shelby engine issues led to production delays to all vintage models."

Shelby angrily dismisses Hasty's claims. He says he became aware of the engine problems only recently.

"The fact that (Hasty) hasn't delivered the cars has nothing to do with the engines," Shelby says. Hasty "accepted the engines and never said one word to me (about the engines) until a couple of weeks ago. These engines have nothing to do with people waiting two to three years for their cars."

One suit, filed in Texas on Sept. 18 by Alan Cummins, alleges that he bought a defective Super Snake in August 2004 from Unique for $188,300 and that the company has neither repaired the vehicle nor returned the plaintiff's money.

Cummins' suit states that Carroll Shelby may be added as a defendant because he endorses the vehicles.

An April 20 suit filed in Texas by Keith and Kevin Rafferty against Shelby and Unique says that their vehicles, which cost $136,000 each, are more than a year late. The plaintiffs say they have paid deposits of nearly $130,000 for each car.

A Sept. 4 lawsuit against Unique by Robert Garner claims that Garner agreed in May 2005 to buy a $189,000 Super Snake and has made two deposits totaling $141,750. Garner says he has no car and says Unique has refused to return his deposits.

In addition to the Shelby vehicles, Unique manufactures vehicles designed by famed car customizer Chip Foose, including a reproduction 1969 Chevy Camaro, a 1970 Dodge Challenger and a Foose Stallion based on the current Mustang. Hasty says Unique has 106 vintage vehicles in various stages of production — 80 Shelbys and 26 Foose vehicles.

106 vehicles ordered
Hasty would not say how much he has taken in deposits for undelivered vehicles. But he says all of the money is being used to produce the 106 vehicles on order.

"Traditionally, production of vintage vehicles averaged 12 months from start to delivery," Hasty wrote. "However, because of the issues with Shelby 427FE engines, Unique's timetable for production of vintage vehicles has doubled to as much as 24 months during the past year while the engine issues were resolved to the company's high quality standards and complete customer satisfaction."

Hasty says that since 2003, Unique has delivered 119 vehicles, mostly Shelbys. He says that two were delivered at the end of September and that the company is on schedule to deliver another 13 cars before the end of the year.

Of the 10 customers that Hasty says have sued his company, he says three cases have been settled and seven are being addressed.

Source: Automotive News