Peddle to the metal: Gene Haas is betting a billion bucks that his F1 team will win Grand Prix races and a worldwide market for his machine tools.

Author:Martin, Edward
Position:Cover story

For pilgrims to the shrines of speed north of Charlotte, this is a cathedral. Through a glass wall in the lobby of Stewart-Haas Racing LLC in Kannapolis, a dozen fans watch mechanics and engineers scramble around 20 Chevrolet race cars on a spotless shop floor the size of a football field. When sated, they browse the adjoining souvenir shop. Some carry off $4.99 jars of hot salsa bearing the likeness of Tony Stewart, the driver they call "Smoke." One admires a smashed, lime-green fender from a wrecked Danica Patrick racer. Price: $125. In a bucket on the checkout counter repose other relics for the faithful. It's full of used lug nuts from Stewart-Haas cars, 50 cents each.

The headquarters of Stewart-Haas Racing, which employs about 250 people, covers nearly 4 acres. Next door is a building nearly the same size that smells of fresh concrete and new carpet. In a conference room, Gene Haas, the less-visible half of one of NASCAR's most successful organizations, plops in the chairman's seat. He's a businessman, founder of the largest maker of computer-controlled machine tools in North America, not an impassioned racer. "If I can make something mechanical that can compete," he says, "that's the holy grail for me." Oxnard, Calif.-based Haas Automation Inc.--he's sole owner--makes tools used by automakers and hundreds of other manufacturers. "We've got about 50% market share here," Haas, 62, says, "but only about 5% in the rest of the world." From this building, completed in October, he is bent on correcting that with a move as bold as Tony Stewart would attempt on the track. Haas Formula LLC's Haas FI Team will be the first U.S. one to race in international competition since 1986. It's likely to cost him $1 billion.

It's really simple, he says. Marketing is the difference between 25-cent, store-brand sodas and the $3 Red Bulls that have become the world's best-selling energy drinks. One way the Austrian beverage-maker markets itself is with its splashy FI cars, and Haas wants to become the Red Bull of machine tools. "Making machine tools is more difficult than soda, but market them right and you can sell a lot more. Our goal is to double sales from $1 billion a year to $2 billion. Most of that will come from the overseas market." Skeptics might twitter, but in the nine months or so since he announced his plans, Haas Automation's sales have increased $50 million. The plan might be simple, but its execution isn't. This is Piedmont North Carolina, not Monte Carlo. NASCAR idol Dale Earnhardt Sr., son of shade-tree mechanic and racer Ralph Earnhardt, honed his skills on these back roads. Ralph Earnhardt lies buried in Kannapolis; his son rests in a dark-marble mausoleum behind his race shops in nearby Mooresville. NASCAR is Timex, Talladega, country singers, Southern drawls and Budweiser. Formula One is Rolex, the Riviera, movie stars, Italian accents and Dom Perignon. State industry hunters hope Haas F1 will give the world a different view of the state's $6 billion-a-year racing industry, cracking the door open for more parts-makers and helping end the quest for their own holy grail: an automobile assembly plant.

Landing a Formula One team is in itself a breakthrough--Haas plans to create 200 to 300 well-paying jobs, the bulk of them in Kannapolis--but Gov. Pat McCrory wants more. He has urged Haas to move Haas Automation, which employs about 1,500 and is the largest supplier of machine tools to domestic automakers, to North Carolina. And Haas sounds interested. "In California, our jobs probably average $60,000. You can't buy a house [with] that there. Here, you can buy a house and have two cars in the garage." Sources say the governor and N.C. Department of Commerce officials met with British racing-industry representatives in Charlotte last spring to tout the region as a rival to "Motorsport Valley," the section of southern England where nearly 3,500 racing-related businesses employ about 40,000 people. It's where most F1 teams are based, the hub of Grand Prix races in 20 countries. Commerce counts more than 1,000 motorsports-related companies in the state, most clustered around Charlotte. Haas' employees will be split between both places. "I'd imagine our average engineer salary will be about $100,000. Overall, employees will probably average about $60,000." A few doors down, Formula One veteran Gunther Steiner, a sharp-featured Italian with a German name who is the team's principal, is assembling people and deals to put Haas FI on the grid for the Australian Grand Prix in March 2016.

"Until six months ago, there were two words you'd...

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