Economy and Technology and Sports Business

NASCAR fuels C&R growth: Maker of custom racing parts diversifies from open-wheel roots

February 7, 2005

Though he's only 45, Chris Paulsen is a grizzled veteran in racing circles. The storied mechanic has already been invited to take part in old-timer events at the Indianapolis Motor Speedway.

But industry sources say Paulsen's future is as wide open and promising as that of a schoolboy with a fresh diploma. The innovations that made him a household name in open-wheel have earned a following among NASCAR's elite, and the insightful entrepreneur even talks of starting his own race team.

Paulsen set out on his own at age 13 to make it as one of auto racing's best mechanics, and debuted at the Brickyard at age 18. Involved in racing through the 1970s and '80s, he took laps as chief mechanic for some of the biggest names in open-wheel racing. Howdy Holmes, Johnny Rutherford and Pancho Carter are but a few.

"He's a great mechanic, brilliant," said Philip Casey, who met Paulsen in the late 1970s and is now Indy Racing League technical director.

When they met, Casey, too, was a chief mechanic, turning wrenches for the sport's upper echelon. He said there was always something different about Paulsen.

"The thing that set him apart was his vision," Casey said. "He always saw things further down the road than almost anyone else."

In 1988, Paulsen's vision told him motorsports was changing.

"The economy was rocky and the cost of racing was just going up so much," Paulsen said. "I wasn't comfortable anymore relying on a driver showing up with a big pile of [sponsorship] money. But being an Indy Car mechanic was what I was all about. So I decided to start a business based on that."

In December 1988, C&R Racing Inc. was born in a 2,500-square-foot building on Gasoline Alley. In 16 years, C&R has become one of the biggest custom-parts makers and fabricators in open-wheel racing, but the shop also burns rubber in just about every other North American circuit.

With its headquarters and custom-parts plant in Indianapolis and a newly acquired division in NASCAR country, near Charlotte, N.C., Paulsen projects revenue to grow from $5.5 million in 2004 to $8.5 million this year.

In a few short years, C&R Racing, which now has more than 50 employees, has gone from NASCAR newcomer to supplying every team in the Nextel Cup with radiators and other innovative equipment. NASCAR-related business now counts for 35 percent of C&R's sales, and Paulsen expects that to grow as testing of new parts is ramping up for 2005 in Daytona and Fontana.

Industry observers say C&R's dramatic NASCAR growth wasn't easy for a Midwestern company with open-wheel roots.

Paulsen credits C&R's success to the company's workers, a unique blend of racing veterans and the area's top machinists. Paulsen's top lieutenants include George Huening, also a former openwheel chief mechanic, and Peter Wilska, former general manager of chassis supplier Lola USA.

Steve Hmiel, chief mechanic for Dale Earnhardt Inc., discovered Paulsen and brought his business to the South. But he won't take credit for spreading the word to other teams.

"Using C&R Racing was a competitive advantage for us, so I was really tightlipped about it," Hmiel said.

Hmiel came to know Paulsen through his love of open-wheel racing and oldtime roadsters. Though many motorsports aficionados don't think technology from open-wheel transfers to stock cars, Hmiel didn't hesitate to seek Paulsen's counsel when seeking improvements to his stock cars' radiators and air flow systems.

Paulsen brought technological advances to NASCAR components. He made the radiators lighter and introduced air-flow systems that allowed for improved aerodynamics.

"The minute we tested his stuff, it was clearly superior," Hmiel said. "Every other race team pretty quickly saw that, too. There was no way we could keep it a secret. The reason Chris has done well down here is strictly performance."

Roush Racing-which runs cars for Mark Martin, Kurt Busch, Greg Biffle and Matt Kenseth-was also an early adopter of C&R components.

"Their reputation here in NASCAR is real strong," said Harry McMullen, Roush's general manager. "Their radiator cools well and is durable. And aerodynamically they've been a very strong performer. They've accomplished a lot in a short time."

Copycats were everywhere. Paulsen made existing components better and invented devices for NASCAR where none existed before. For instance, Paulsen developed a motorized mechanism that hooked to a car to quickly cool the engine after qualifications or other runs. Before, NASCAR teams did the job with a garden hose.

It's not easy breaking into NASCAR's inner circle, Hmiel said, but it wasn't long before series officials were seeking Paulsen's advice on technological advances. He responded by making NASCAR cars not only faster, but safer, too. C&R's new composite seat, sources said, is a life-saver.

Instead of chasing patents and policing copying competitors, Paulsen simply speeds ahead, Hmiel said, staying a lap ahead of the competition.

"This business changes too fast," Paulsen said. "You have to keep your foot on the throttle."

Four years ago, C&R Racing moved from Gasoline Alley to a 35,000-squarefoot facility at 6950 Guion Road. With Paulsen's aggressive five-year plan, another expansion can't be far off.

"I'd like to own my own race team," Paulsen said. "We have the capabilities and it would be a good extension of the business. And that's where my passion lies."

Even though industry insiders said making a jump to team ownership is a massive leap, few are willing to bet against Paulsen.

"When I first heard about this 19-yearold mechanic and car builder, I wondered if this kid could be as good as everyone said," recalled Johnny Capels, former team owner and chairman of U.S. Auto Club. "He's quieted every doubter. He has a moxie that allows him to succeed in whatever he does."
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