When Jay Steel was introduced to the assembled throng at last spring’s AERA International Expo 2003 as the winner of Engine Builder’s 2003 “Machine Shop of the Year” award, he was intimately involved with the down and dirty business of rebuilding and restoring all manner of antique engines.

His shop’s lineage descends directly from the great Southern California hot rod builders of the 1950s. His expertise is in Ford Flatheads. His writings on the subject have been published nationally in magazines and books.

So how surprising is it that a majority of Taylor Engine’s work is currently in preparation of brand spankin’ new Saturn racing motors designed to compete directly against Hondas, Toyotas and Mitsubishis on the Sport Compact Performance drag racing circuit?

Well, if you’re familiar with Jay Steel, you know that he’s not the kind of businessman to say no to an opportunity just because it’s different. Even though nostalgia and restoration engine builds are very profitable, he believes only a fool fails to answer the door when opportunity knocks. And for this old dog, the tricks of the sport compact market are a pretty big bone to be chewed.

“Custom engine rebuilding is our specialty,” explains Steel. “My motto is ‘Antiques to Hardcore Racers.’ We do about 60 Ford Model A/B four-cylinder engines a year, along with other exotic or unknown engines. But we also do block preparation for race engine builders along with lots of engine balancing.”

Despite its reputation as one of the leaders in antique and restoration work, it has always been Taylor Engine’s practice to keep up with the changing times, says Steel. This includes adapting to new technologies and markets as well as constantly updating machine tools and equipment. Taylor Engine has a wide variety of machine tools that help to achieve a more precise job, but Steel stresses one of the key’s to his shop’s success has been – since its founding – the dedication of its employees.

Taylor Engine was originally formed in 1947 as Southern California dry lake bed racing was helping to push the limits of automotive technology. Racer Nellie (Nelson) Taylor experimented with different engine combinations in his ’32 roadster to reach a maximum speed of 127.11 mph. Fellow Gophers Car Club member John Ryan was topping out at 124.13 mph in the 268 Mercury motor in his ’32 roadster. Both of them used Earl Evans’ speed equipment (also a member of the Gophers) so when Taylor and Ryan decided to go into business together, it was in Evans’ shop that they started building motors for other racers.

In addition to many others, Taylor and Ryan built motors for racing legends Ak Miller and Mickey Thompson, as well as Calvin Rice, who won the first-ever NHRA Nationals in 1955. Rice’s dragster was powered by a 324 Ford Flathead V-8 running on 60 percent nitro, and was just one of several record-setters built by Taylor and Ryan.

As the oldest operating automotive machine shop in Southern California – and one of the oldest continuously operating members of the Engine Rebuilders Association (AERA) – Taylor Engine today serves a wide variety of customers. Jay Steel says he still loves the business but acknowledges that the industry has changed since he bought the shop 31 years ago.

“It appears to me that the future is bright for the custom engine shop, but you must find a profitable niche such as the antique or high-performance market. The Chevy 350 market is dead, unless you want to work for free!” he says.

“The bottom line is, because of the evolution of the ‘throw-away’ engines, mail order and mass-merchandisers, the industry’s traditional marketplace is changing,” Steel says. “You must adjust your shop policy, advertising and marketing posture and invest in new machinery. Above all, don’t be afraid to try something new. Remember, we are all supposed to be entrepreneurs.”

It is his flexibility and willingness to “try something new” that brought one of Steel’s newest business opportunities into his shop. “We’re doing block preparation of brand new GM 2.2L Ecotech engines for a Saturn racing program funded by Jim Eppler Motorsports in Indianapolis. The alcohol-powered engines will be running about 50 psi of turbo boost, so we’re doing things to make sure they’re durable.”

Steel says his shop is currently filled with 13 of the Saturn engines and each of his employees has a part in meeting the quota. “The blocks come from GM with a list of things we’re supposed to do: bore and hone this to size, align bore to this size, drill and tap that