Holley Performance Products Inc.

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Holley Performance Products Inc.

1801 Russellville Road
Bowling Green, Kentucky 42101
U.S.A.
Telephone: (270) 782-2900
Fax: (270) 780-1858
Web site: http://www.holley.com

Private Company
Incorporated: 1917 as Holley Kerosene Carburetor
Company
Employees: 909
Sales: $147 million (2001 est.)
NAIC: 336311 Carburetor, Piston, Piston Ring, and
Valve Manufacturing

Holley Performance Products Inc., based in Bowling Green, Kentucky, is a major manufacturer of aftermarket components used in racing, street, marine, powersports, and industrial high-performance engines. Holley’s extensive product lines include performance carburetors, superchargers, intake manifolds, ignition systems, fuel pumps, exhaust systems, internal engine components, and engine kits. The company also produces re-manufactured carburetors and fuel injection components. In addition to Holley, brands include NOS, Hooker, Weiand, Flow Tech, General Kinetics, Lunati, Earl’s, and Annihilator. Holley Performance products are found at major retailers such as Advance Auto Parts, AutoZone, and O’Reilly.

Holley Brothers As Automotive Pioneers at the Dawn of the 20th Century

The founders of the company that would evolve into today’s Holley Performance Products were brothers George and Earl Holley, who grew up in Bradford, Pennsylvania. The eldest, George, was born in 1878, and Earl was born three years later. At a young age George became fascinated with motorcycles and the internal combustion engine. In the 1860s there had been some experimentation in powering a bicycle with a steam engine, but the combination proved far too bulky. Then came the invention of the four-cycle gasoline engine by Nikolaus August Otto. A German engineer named Gottlieb Daimler, who worked with Otto, began developing engines and a reliable self-firing ignition system in order to propel a vehicle. He and his collaborator, Wilhelm Maybach, first powered a boat with their engine, then in 1885 fitted it to a wooden bicycle frame, producing the world’s first motorcycle. Almost 20 years would pass before the motorcycle developed into a truly commercial vehicle. In the meantime, Daimler and Maybach moved on to produce one of the earliest automobiles and form Daimler Motor Company. Daimler’s legacy is still recalled in the name of one of today’s top automakers, DaimlerChrysler.

George Holley was one of many inventors who followed in Daimler and Maybach’s footsteps. As a teenager he built and raced his own motorcycles, and Earl soon began to help him. In 1897 they designed and built a three-wheeled, single-cylinder automobile capable of going 30 miles per hour, which they dubbed The Runabout.

Earl was working as a bank teller, when in 1899 the 18-year-old put his limited business knowledge to work by joining forces with his brother to form Holley Motor Company to manufacture motorcycle engines. Earl, serving as president, handled the administrative end, while George, the chairman of the concern, was in charge of engineering and sales. The demand for motorcycle engines, however, proved to be limited because what customers wanted were complete motorcycles. The brothers began making motorcycles, and George promoted the business with his considerable driving skills. In 1902 he won the first Motorcycle Endurance Contest, and set a number of world speed records for motorcycles at the prestigious Pan American Exposition in Buffalo, New York.

Introducing the Iron Pot Carburetor in 1904

The Holley brothers turned their focus to automobiles after they gained the U.S. rights to a French carburetor. In 1903 they produced their first four-wheel automobile, The Holley Motorette, and although they would sell more than 600 over the next three years, the Holley brothers sensed the need to specialize as the automotive industry began to sort itself out. They were approached by Henry Ford in 1903 to produce carburetors for the Model T, and along with partner George Welch they formed a new corporation, Holley Brothers Company, to produce carburetors as well as ignition-system components.

In 1904 they introduced their first carburetor, the “iron pot,” for use in the curved-dash Oldsmobile. When it also began to be used by Ford, the brothers decided to move their operations from Bradford to Detroit, the heart of the rapidly growing U.S. automotive industry. Their first Detroit plant opened in 1907, the same year that their ignition business got a boost when a car using a Holley Magneto won a major 24-hour race.

Over the next ten years the Holley brothers prospered in Detroit, growing in tandem with Ford, and even starting a plant to produce a kerosene carburetor for Ford tractors. In 1917, Henry Ford, who liked to control all aspects of automobile manufacture, decided to acquire the Holleys’ car carburetor business. Following the sale, the brothers reorganized around the tractor division, forming Holley Kerosene Carburetor Company, and in addition to Ford they began selling their product to Chevrolet and International Harvester. During World War I, Holley not only sold carburetors and ignition components to the army, but also brass heads for artillery shells. In the final year of the war, because they were no longer limited to the manufacture of kerosene carburetors, the brothers changed their company name to Holley Carburetor Company.

In the 1920s the Holleys branched out into a number of directions. In 1926 they built another Detroit factory, which included an advanced research facility. It was also during this period that the company began to provide carburetors for the airplane industry. Only used at first by Curtiss-Wright, Holley’s airplane carburetors were quickly adopted by American Airlines and Pan-American Airlines, as well as the U.S. Coast Guard and armed forces around the world. In 1935 the company introduced a variable venturi carburetor that overcame icing problems. The popular DC-3 airplane adopted the new carburetor, and then during World War II it was adapted for use by bombers and PT boats. Also during the 1930s, Holley expanded its range of automotive parts to include distributors, circuit breakers, heat regulators, and fuel pumps. To help support the growing business, in 1939 Holley opened yet another plant, this one in Portland, Michigan. The extra capacity would soon be vitally needed for the war effort. According to Holley, half of all carburetors used by U.S. troops were made by its factories, whether they were used in cars, trucks, boats, or airplanes.

Because of wartime restrictions, new commercial vehicles were not produced during World War II. With the economy booming after a decade of depression and pent-up consumer demand, the automotive industry was set for a period of explosive growth. Holley, with a second generation getting ready to take charge of the business, also was prepared to prosper in the postwar environment. In 1946 the company opened a new plant in Clare, Michigan, and two years later a factory in Paris, Tennessee. During this period Holley introduced fuel control devices for gas turbine and jet airplane engines. The company also began to produce a line of side air inlet carburetors for use in trucks and buses. On the automotive side, Holley improved ignition efficiency by developing the first pressure distributor. To accommodate the new robust automobiles that Americans wanted, Holley brought out a four-barrel carburetor. In addition, the company became involved in the aftermarket business, offering genuine Holley parts and carburetor repair kits.

The 1950s saw a number of changes at Holley. In 1951 the main Detroit plant was closed and a new factory was established in Warren, Michigan. Holley then moved into Bowling Green, Kentucky, opening a factory in 1952. The following year, management began to turn over the reins to a new generation. Earl Holley retired from day-to-day responsibilities and George Holley, Jr., became president of the company. Also taking top positions were Danforth Holley, director of Cost Savings, and Jack Holley, vice-president of Sales. Earl Holley stayed on as vice-chairman of the corporation until his death in 1958. Older brother George outlived him, eventually passing away in 1963 at the age of 86. As automobiles changed during the 1950s, becoming ever more powerful, Holley’s research and development team kept pace. Today’s modular carburetor is the result of work from this time, which resulted in the development of the 4150-four-barrel carburetor used in the 1957 T-Bird. On the other side of the spectrum, compact cars also were becoming popular with the car-buying public. To accommodate the specific needs of this market, Holley designed a single bore carburetor, which was then modified for each compact model.

In 1965 Holley manufactured its 100 millionth carburetor. Although the carburetor remained the company’s signature product, Holley had branched into numerous other directions since the introduction of the iron pot. Not only were Holley parts sold around the world, in 1963 a European subsidiary opened a factory in Turin, Italy, to manufacture carburetors, governors, and fuel pumps overseas. To take the next step in growing its business, as well as achieving diversification, Holley chose in 1968 to merge with Colt Industries in a tax-free merger. Colt ultimately changed its name to Coltec Industries, a company with aerospace and industrial operations in addition to automotive parts. Holley merged its Clare, Michigan operation with Colt’s Chandlier aircraft division and, renamed as Holley Replacement Parts, the business began a period of expansion. Factories in Water Valley, Mississippi, and Sallisaw, Oklahoma, were acquired in 1973, and the Paris, Tennessee facility built a test laboratory. Holley’s popular DOMINATOR racing carburetor, which was launched in 1968, was now modified to produce a consumer line of DOMINATOR intake manifolds. To accommodate fuel-efficient cars, which were becoming increasingly more important, the company developed economy carburetors to fill out their product line. In 1985 Holley also became involved in the fuel injection market.

Company Perspectives:

For over a century, since before the Holley Brothers Company was founded in 1903, the Holley name has been synonymous with high performance.

Around 1980 Holley reached its peak in employment with 2,800 workers. Also at this time the company decided to stop manufacturing original-equipment carburetors and focus on the growing auto-racing market. By the mid-1990s employment dipped below 1,000. Holley Replacement Parts Division was renamed Holley Performance Products in 1994 and subsequently moved its administrative offices to Bowling Green, Kentucky, as well as its warehouse operations, which had been located in Goodlettsville, Tennessee. In addition, a state-of-the art research and development center was built in the Bowling Green facility. A Detroit sales office, however, was retained to serve automakers and other regional customers.

As a result of these changes, all of Holley’s operations were brought closer together, allowing for greater efficiency and better coordination. Centralization was especially helpful in bringing new products to the market, with engineering, research and development, testing, and manufacturing better able to function as a team. Product development also was enhanced by the rise of new technologies, from modeling techniques to automated production equipment and assembly systems.

Management-Led Buyout in 1998

Coltec decided in 1996 to focus its resources on the aerospace and industrial divisions, and it began to divest itself of its automotive components businesses. In 1997 Jeffrey G. King was named president of the Holley Performance Products Division. He came to the company with ten years of experience at Arvin Industries, an automotive systems and components company, and three years at Lincoln Brass Works, where he quickly rose to the rank of executive vice-president and chief operating officer. After only a year with Holley, in 1998, King led a management group in a buyout of the subsidiary, which at the time was generating annual sales of $100 million. Sponsoring the buyout was Kohlberg & Co., a private merchant banking firm operating out of Mount Kisco, New York. Kohlberg invested $51 million in the $100 million deal, gaining a 97 percent stake in Holley. King quickly made it known that the newly independent company would be aggressive about buying into new markets, and was especially interested in moving into the expanding power sports area, which in addition to motorcycles included personal watercraft, snowmobiles, and four wheelers. King’s vision, in essence, was to make Holley into a one-stop shop for engines, with the intention of controlling the fuel air from the point it entered an engine to where it exited through the exhaust.

King soon backed up his words with actions, as over the next two years Holley completed a number of acquisitions. On the day the management buyout was completed, in fact, the company announced the acquisition of the fuel injection division of Florida-based Hirel Technologies, which added to Holley’s marine product line. Several months later in November 1998, Weiand Automotive Industries of Los Angeles was acquired. Weiand was a highly regarded name in the performance market, manufacturing intake manifolds, water pumps, and supercharger technology for the marine, street performance, and racing markets. Also that month, Holley acquired Lunati Cams and Lunati Pistons of Memphis, Tennessee, adding lines of camshafts, crankshafts, pistons, and connecting rods. In October 1999 Holley bought the Marine and Automotive Supercharger Division of B&M Racing and Performance Products of Chatsworth, California. Holley soon made other important acquisitions, adding Hooker Headers and FlowTech Exhaust Systems of Phoenix, Arizona, followed by the purchase of Nitrous Oxide Systems, Inc. (NOS).

To support its growing stable of subsidiaries and product lines, Holley supplemented its salesforce by forming strategic alliances with several regional sales agencies in 2000. Also in that year, Holley added to its production capacity by striking a deal to move into a 350,000-square-foot facility in Aberdeen, Mississippi. The building, jointly owned by the city of Aberdeen and the county, was formerly used by Walker Manufacturing Co. to produce automobile exhaust systems. Holley personnel originally visited the site to consider buying some of Walker’s equipment, but quickly recognized that the plant, which had undergone major renovations, was an attractive site. Moreover, Walker was leaving behind an available trained workforce. With Walker also leaving a vacuum in the local economy, Holley was able to negotiate favorable terms from area officials. Operations at Aberdeen began in January 2001, with 70 percent of the workforce former Walker employees. Holley was then able to close an Arizona facility as well as two Mexican plants, which had been purchased only two years earlier, and transfer those operations to Aberdeen. With a downturn in the economy the level of new business failed to meet Holley’s expectations and Aberdeen employed only about 100 instead of the 150 originally projected. As a consequence the Bowling Green distribution center did not hire an additional 100 workers as planned. Although Holley was now generating $160 million in annual revenues, it was not performing at an acceptable level. In August 2002 King resigned and was replaced by the chairman of the board, James Wiggins, who announced his goal of making Holley into “a lean manufacturing operation.” Several days later 23 employees were laid off.

Holley approached its centennial as an important player in the aftermarket parts industry. To celebrate its past the company prepared a fleet of ten unique stock vehicles, representing the ten decades of the company’s history, each one relying heavily on Holley high-performance parts. One of the two existing Motorettes would be part of the touring show. With 100 years of accomplishments behind it, Holley, despite some bumps in the road, looked forward to many more years of success.

Key Dates:

1897:: George and Earl Holley build a three-wheeled vehicle, The Runabout.
1899:: The Holley brothers form a motorcycle engine company, in Bradford, Pennsylvania.
1907:: Headquarters moves to Detroit.
1917:: Following the sale of the carburetor business to Ford, the Holley brothers reorganize as Holley Kerosene Carburetor Company.
1918:: The company is renamed Holley Carburetor Company.
1951:: The Detroit plant closes.
1968:: Holley merges with Colt Industries; the Holley Replacement Parts Division is formed.
1994:: The name is changed to Holley Performance Products.
1998:: Management buys the company from Coltec.