Print

Email

Restoration Engine Market Update

The resto market can be a good source of extra business or a solid specialization option

By John Gunnell

You might joke that the restoration engine marketplace is a “dependable” business niche. Trying to get a handle on its size, shape and character depends on with whom you talk and what they consider a vintage car to be. A number of companies rebuild engines for vintage cars while others rebuild vintage car engines. There is a definite difference between rebuilding a modern engine that’s going into a vintage car, and rebuilding a vintage engine that’s 40-100 years old.

Some rebuilders focus on muscle car motors and others only do horseless carriage engines. A few rebuild hundreds of older engines per year, while others do a half dozen. There are specialists like Jeep supplier Omix-ADA (www.omix-ada.com) that deal with one type of engine, and others like Fred Seydel of Fred’s Engine Service in Chester County, PA, who said, “My advantage is I’ve seen the insides of hundreds of different engines from Stutz to Nash to Whippet motors.”

There are companies that only supply parts for vintage engines, companies that only rebuild vintage engines and companies that do both. Some firms in this niche have facilities that span several thousand square feet, while semi-retired Mr. Seydel, who does national advertising, works in a garage behind his house.

Most rebuilders seem to be in the 50- to 85-year-old bracket, which is pretty much true of their customers, too. A lot of shops that work strictly on vintage engines have been around a long time. Harken Machine Shop of Watertown, SD, dates to 1906; Harts Machine in Cecil, OH, started in 1926.

After talking to dozens of businesses that do this type of work, one is left with the overall impression that the niche isn’t big, but that it is good. The small firms that have experience in this area are, for the most part, either thriving on the “old car” work or using it to fill in for other jobs that have gone away. At the same time, the big parts suppliers and shops are growing because the overall market is growing, and also because some of them are supplying the small shops.

Getting A Handle On Market Size
Promar Precision Engines (www.promarengine.com), of Paterson, NJ, is a big company that some years back detected a nationwide resurgence of classic car restorations. Promar was already serving customers worldwide with a complete line of rebuilt and remanufactured engines, cylinder heads, crankshafts, engine restoration services and components. So, the company decided to create a specialized business to rebuild older engines delivered to its New Jersey location. Promar sent representatives to classic car shows, provided car show trophies and placed ads in collector magazines to promote this program.

“We still rebuild vintage engines,” says company CEO and president Mark Fellanto. “We probably rebuild three to four classic car engines per week on average and sometimes more; they represent about 10 percent of our business.” Fellanto was one of relatively few people interviewed for this article willing to put numbers on the classic engine business, but almost all of them – whether huge like Promar or a tiny sole proprietorship – saw the restoration niche as a segment that’s generated additional business during the current economic downturn.

Rich Falluca’s Skokie, IL, company is called Antique Engine Building (www.antiqueenginerebuilding.com) and has been rebuilding Model A Ford engines for 35 years. He says that for most of that time he did about 100 engines a year, but lately the average number he’s rebuilding is hovering around 140.

“Even in this down economy, the Model A business is holding up very well,” says Falluca. “And it only seems to be growing.” Falluca’s offerings start with a Model A short block modified for insert bearings for $2,075, and range up to a long-block Touring engine with a 5.5:1 compression head for $4,295. Falluca sells parts to customers all over the world, but says the market for rebuilt engines is mainly in the US, ranging from California to the East Coast. “Our website tells people how to crate parts to save on domestic shipping,” Falluca points out.

Jim Ketchum and Steve Markley work for Egge Macine Co. (www.egge.com), which started in 1915 and moved to Los Angeles in 1923. Years ago, Egge rebuilt old engines and sold parts for them, but now it is totally a parts supplier. “Each day we quote out about 50 rebuild kits and most of them get billed,” they said. “Annual kit sales are in the thousands and many go to restoration shops. We ship some direct to machine shops that do engines for restorers, and some – but not as much as years ago – go directly to consumers.”

According to Jim and Steve, Egge deals in engine parts for 1900 to 1980 vehicles and sells a lot of Hemi and flathead Ford V8 parts. Egge manufactures valves and pistons for vintage engines and the other parts it sells are new old stock items. Most Egge products are for American cars, though the company has made some parts for Mercedes-Benz and Rolls-Royce cars and vintage motorcycles. They said the vintage niche is “growing, but not tremendously,” and noted that they tend to add a few parts for newer collector cars as they go along.”

Bob Rovegno of Rebuilders Choice/Packard Industries, another big player in the field, says, “The antique engine market is still small from an engine rebuilding industry point of view, but it’s a niche that is thriving as the collector car market grows. A growing market is a great opportunity for shops to add additional income as parts once considered obsolete are now available.” Rovegno didn’t reveal the annual number of vintage engine rebuilds, but did say that 70 percent of Rebuilders Choice sales involve engine parts for 1920s-1970s cars.

The Shape Of The Market
Wegner Motorsports (wegnerautomotive2.com) is a nationally-known source for engines, components, machine work and dyno tuning. Carl Wegner says his 7,500 sq.ft., facility located on a farm in Markesan, WI, has 30 employees and builds around 500 engines per year. After years of specializing in NASCAR engines, in 2011 Wegner decided to expand into the muscle car niche.

Wegner sells three to five engine kits per week that amount to $1,200,000-$1,500,000 in annual sales. Most of Wegner’s kits are for GM LS series powerplants. Many of these engines wind up in Resto-Mods – vintage muscle cars that are restored with modern drivetrains. Wegner sells to shops, distributors and hobbyists and says that the market is starting to grow again.

Ken Ligenfelter is a serious car collector himself and his Ligenfelter Engineering (www.lingenfelter.com) works on about 25 traditional small- and big-block engines annually. He says that some customers send their engine to him and others ship the complete car. At approximately two engines per month, this is about 5 percent of the company’s overall business and, according to Ligenfelter, covers traditional small block, traditional big block and LT5 (original Corvette ZR1) engines.

“We have customers from all over the world who select Lingenfelter Performance Engineering for their engine work,” says Ligenfelter. “Our sales numbers are holding pretty status quo, neither up nor down, and our traditional small-block and big-block engine work is holding stable.”

Ligenfelter says that his customers are “primarily involved” in the hot rod and restoration segments and only a very small percentage are racers. As many car enthusiasts know, when it comes to vintage engines, rodders and restorers have a lot in common.

Speedway Motors (speedwaymotors.com) supplies both niches with products ranging from stock rebuild components for flathead Ford V8s to electronic distributors for flathead Fords and Chevy sixes. Company owner “Speedy” Bill Smith is also one of the largest collectors of vintage engines.

While these big suppliers shape part of the restoration engine market, the restorer looking for help in rebuilding a Pontiac straight eight or a Buick “nailhead” V8 is probably going to go to a newsstand or surf the Web looking for advertisements from specialty shops that know how to fix old engines and where to find parts for them.

Some companies like the aforementioned Egge and Rebuilders Choice can help, but there are also businesses such as Northwestern Auto Supply (www.northwesternautosupply.com) and Terrill Machine Co. (www.terrillmotormachine.com) and others that, over the years, bought up the obsolete remainder parts that no one else wanted and started supplying them to both professional restoration shops and backyard restorers.

Another group that shapes the restoration engine market shows up in car collecting publications best known for printing thousands of classified word ads each month and distributing them to well over 325,000 serious old-car hobbyists. In these publications, the engine restoration ads break down into two categories: shops that do babbitting work and shops that rebuild old engines.

In a typical issue of one magazine, we found seven ads for babbitting services and 12 from engine rebuilders. The ads often emphasized that the shop had been in business since the early 1900s, or the ‘20s, or the ‘40s or the ‘60s, etc. When we called some of these businesses, we were told that the number of such ads appearing each month has probably doubled during the current recession.

A Mile Wide And An Inch Deep
People selling collectibles on eBay say their market is “a mile wide and an inch deep.” In other words, customers for collectibles are all over the world and interested in different things. In such a market, you deal mainly with customers who you never meet. You sell them something at the “prevailing market price.” The condition of what you sell and honest dealing are critical. Cheat and every collector will know it. You may never get a repeat sale, but if you’re lucky and find a big collector, you’ll get many. The vintage engine niche is somewhat like this.

As mentioned earlier, Terry Harkin’s machine shop in Watertown, SD, has been around since 1906. He says he “does not do many” complete engine rebuilds a year, but a lot of babbitting. Except for Chevys and a few Hudsons, most jobs are for prewar engines. “This business has gotten bigger over the years,” Harkin explains. “Now, we get them from all over the world and a lot from the West Coast and New York. You work for one guy and do a good job and he tells his friends ­– I think that’s what happened with the business I get from New York.”

Zigmont Bilus of The Babbitt Pot in Fort Edward, NY, says that he used to have customers sending in lots of bearings in boxes for him to rebabbitt, but now the big demand is for rebuilding and that babbitt work is down to 25 percent of his business in the past four to five years. Bilus is in his 70s and most of his customers are older, semi-retired people.

“They make up most of the market,” he notes. “But I also get 10 percent from younger people who are doing well and restore cars as a hobby. Bilus does what he calls, “Pre-teens to 1940s engines.” He stays away from muscle cars because he doesn’t have modern equipment. “I have a valve seat grinder with a stone,” he says. ”I do them one at a time.”

Like many antique engine rebuilders, the Babbitt Pot sees work coming in from far away. “Every year, the radius for my work punches out a little further,” Billus points out. “Now, I get people from New England, Jersey, New York, Arkansas and Florida calling and saying ‘I saw your ad’ and they’re shipping them in from all over; well, a Packard engine can cost $500 to ship these days.” When customers ask what it costs, his stock answer is “$1,000-$1,500 per cylinder bore.” To his amazement, the jobs still come in. “I was used to doing a half dozen a year, now I’m doing 12 to 18 just to keep busy, since the market for babbitt work is shrinking and fewer people are doing what I do with the babbitt work included.”

It’s hard not to take Dennis Stinehart’s laugh as a sign that he’s very happy with the level of business at his Berry Machine Co. in Mason City, IA. “We specialize in old stuff and babbitting and we’re busier than buckshot,” he tells us. “We’re doing the engine for a ’24 Cadillac that was in the ‘Driving Miss Daisy’ movie and came in from Warren, MI. We’re also doing the engine for an old pickup from Denton, TX and a V16 for a 1939 Cadillac limo.”

Stinehart also says that business seems to be growing each year. “And we don’t do muscle cars,” he stressed. “There’s three other shops in town and we let them mess with that stuff. For us, the important thing is doing things right because our clients want that. We even run the engines in the shop before they go out.”

Fred Seydel’s business in Chester County, PA, is called Fred’s Engine Service. He says he redoes “a dozen engines in a good year” and he only does complete rebuilds that are actually restorations. He paints an engine as soon as the metal is cleaned and says, “to my customers, appearance is 0just as important as the mechanical work.” Seydel feels that engines are too expensive to ship and sticks to jobs in a 500-600 mile range of his shop. “I have quite a following within 50 miles, with a lot of repeats,” he explains. “I get a lot of older, wealthy clients who have more than one car and that means a lot of repeat business.”

Like some – but not all – antique engine rebuilders, Seydel finds that his business is “very seasonal with no winter work.” He says that his advantage is all of the different engines he has worked on over the years. “I was 16 when I started on this stuff and I’m still working on the same stuff I was doing then,” he emphasized. “There’s no book that teaches people what I do and I offer my customers a lot for their money; if they’re local, I even go over to their place to start the engine for the first time, because it’s important to start them right.”

Russ Schworer of Paul’s Rod & Bearing (paulsrodsandbearings.com) in Parkville, MO, says he’s making a living doing babbitt bearings. “We saw many machine shops go under four or five years ago,” he points out. “Old timers knew how to do it, but babbitt is so specialized that their businesses struggled.” Schworer said it amazed him how previous recessions did not impact his business, “But this one definitely did,” he admits. “A year ago last December things were really slow, but now it’s getting better. I’m not seeing optimism, but the big doom and gloom mentality is gone.”

Schworer says that the restoration market has helped. He is doing about 65 percent of his business for antique car engines these days. He’s helped restorers with a 1907 Rolls-Royce engine and one for a Packard, plus lots of Model T and Model A Ford stuff. He has more than 600 vintage rods and pistons in stock. “We have a lot of people who just come by here and clubs like the Antique Truck Historical Society. Our best customers are probably John Deere restorers.”

To stay healthy businesswise, Schworer watches his accounts receivables closely and keeps suppliers on a short leash. “The restoration customers have enough money and it seems like the economy isn’t bothering them,” he explains. “And sometimes these cars have sentimental or investment value.”

According to Schworer, there’s definitely still a market in babbitt and I have photos of neat old cars we did all over the place.” Unlike some other shops, Paul’s stays busy even in the summer and winter months. “My customers are restoring cars in the winter, so typically wintertime is a pretty good season for us,” he says.

After joking that he had a huge shop with 500 employees, Mike from Vintage Engine Machine Works in Coeur d’Alene, ID, says his one-man shop does “total restorations” of just five to six engines per year. “We specialize in full-blown show engines for old cars and old boats,” he says. “We paint the parts before we put them together and our customers want the gaskets to show for the car shows.” VEMW does rebabbitting and rebuilding of mostly American engines.

“The economy has been in a steady decline the past few years so I say a lot of prayers and do a lot of hoping that the phone will ring,” Mike notes. “But in the past year I did a Cadilac V8, a Model A Ford four-banger, a 230 Dodge flathead six and a 192 Chevy overhead-valve six. A few years ago, I actually had a run on Chevy sixes and I’ve done Buick, Packard and Hudson straight eights. I haven’t done many Ford flathead V8s lately. What I get in really varies.”

To get an overview of the restoration engine market we asked Angelo Van Bogart, editor of Old Cars Weekly (www.oldcarsweekly.com) what he’s seeing and hearing about engines from his 70,000 readers. He says there are two types of rebuilders, those building modern type hot rods with crate engines, and those who will go to extreme lengths to keep an engine original. Van Bogart feels that years ago auto collectors would rebuild their own engines, but that today both backyard restorers and restoration shops rely more on professional rebuilders.

The hardest part about building a vintage engine is that it isn’t a small-block Chevy,” Van Bogart stated. “Often, if a supplier is out of parts, they will wait until demand builds before firing up the machines and making another batch.” When Angelo had a 1955 Cadillac V8 rebuilt, he found it hard to locate someone who knew the nuances of his engine during reassembly. “As cool engines like early Olds V8s and nailheads and flatheads become older, the supply of running parts cars decreases,” says Van Bogart. “Old engines like these seem to now be sourced from people’s garages, where they have been stored for many years, or from long-parked salvage vehicles, and in both cases, they need to be rebuilt.”

Bottom Line
What it all comes down to is that the restoration engine market is like the collector car market itself. This niche is a small part of the engine rebuilding industry, but it’s also keeping the doors of many smaller, veteran machine shops open. In other instances, it’s providing a very good supplement to the regular business that some larger shops enjoy. And it’s important to add that many in this niche feel it is growing, due to classic car auctions being seen on TV and the move to collect more later model cars as they age and become part of history.