Peddle to the Metal

0
Peddle to the Metal
From left

Bob Egge talks about obsolete engine parts as if he were born in a machine shop. He wasn’t, but he was certainly born into one. As he walks through his shop, the unassuming third-generation owner of Egge Machine Co. takes a muffled pride in explaining the difference between the pistons for 216 Chevy and 348 Chevy engines, or in professorially recounting the history of a vertical machining center used to make engine parts.

The Santa Fe Springs company specializes in making obscure classic car parts that are hard to get elsewhere. It’s a business that has evolved and grown over the years, as has the definition of which models can be defined as a classic.

But that’s just fine with Egge.

“Everyone wants the car they had in high school,” said Egge, who started working at the shop before he could shave. “The baby boomers came along and increased the market by leaps and bounds.”

The company has repurposed itself several times as the American auto industry has changed. When Bob’s grandfather, E.N. Egge, founded the company in 1915 in Plainview, Texas, it sold, serviced and repaired Mason racing cars. He moved the company to downtown Los Angeles in 1923, where it began to supply tractor engine parts during California’s citrus boom. In the postwar era, Egge provided parts for speed shops, responding to the rising popularity of hot rods. In the ’60s, the company began catering more and more to customers with older cars, an audience that has since expanded.

Today, 70 percent of the company’s sales are to professional installers and retailers who work with hobbyists on their engines. Such businesses rely on suppliers such as Egge to provide parts on an as-needed basis. Sales to do-it-yourselfers make up the remaining 30 percent.

“Egge is in kind of a little market by itself,” said Juan Perez, sales manager at Compton engine remanufacturer United Engine who buys from Egge when building classic car engines. “There are a few other companies that do what they do, but Egge pretty much owns that market on the West Coast. If you’re looking for something real oddball, that nobody else has, Egge’s the place to go.”

But in today’s fast-evolving business environment, Egge is once again faced with the need to adapt. The Internet has created a more purely price-driven consumer, and the company has turned to social networking as a way to keep personal relationships alive online – although even company executives admit they don’t know how it’s all going to work out.

“It’s easier to stay involved and wonder where it’s going, than not to be involved and wake up one day and discover it’s too late,” said Ernie Silver, chief executive since 2005.

In addition to its efforts, Egge has benefited from a spate of TV shows glamorizing classic cars for a younger generation. The company has been getting its name in front of TV viewers by sponsoring a weekly feature on “My Classic Car,” a Speed Channel cable program.

The company also hopes to broaden its reach by launching an expansion into the market for vintage suspension, adding equipment including rear suspension parts.

Fiscal year 2008 was the company’s biggest year ever in terms of revenue with $4.3 million. But that was followed by a recession-fueled slump last year to $3.7 million.

Classic Toyotas

Starting in the 1950s, Bob’s father, Nels Egge – partly out of good business sense and partly out of sheer interest – went on a buying spree, snatching up pistons, valves and other engine parts for classic cars.

Thanks to that jump-start, Egge Machine’s warehouses now shelter internal engine parts for cars dating back to the early 1900s. Workers can also make parts to order using a large collection of moldings and other machines, some of which date back to the prewar era.

“It was a lot like an investment, except I don’t think he knew they would be valuable when he acquired them,” Bob Egge said.

Joe Sebergandio, owner of Motor Media Inc., the sales arm of Diamond Bar-based automotive trade organization Specialty Equipment Market Association, said Egge’s unusual history enables it to appeal to some parts of the classic car market more than others.

“Many classic cars nowadays, although they may have 50- or 60-year-old bodies, use modern engine parts or crate motors,” Sebergandio said. “I think it’s folks that are keeping the original motors or modified original motors that appreciate what Egge has.”

Since the company began concentrating more on classic cars, it’s adapted to changing definitions of the term. In the early ’90s, the company decided to start making parts for cars built in the 1970s, but since then hasn’t expanded its definition of a classic car.

Great debate

“It’s one of the great debates in the industry – what’s a classic? For us, the pre-’80s have desirability because of Americana and nostalgia,” Silver said. “The debate is will people be restoring Toyotas and Hondas in the future.”

And the answer? “What pulls us into the market is discontinuance. The demand for the sheer not available,” he said.

Don Derting, parts manager of engine remanufacturer L & R Automotive Supplies in Santa Fe Springs, believes there will be some slackening of demand for classic car parts.

“It’s softened up a little bit, but they’re still getting $50,000 and above for vehicles,” Derting said. “It’s going to shrink a little bit due to the vehicles deteriorating.”

Less reserved about the industry’s future is Mike Herman, owner of H&H Flatheads in La Crescenta, another Egge client that builds vintage engines for Ford Flatheads and Model A’s.

“In the ’80s, we thought this was gonna die and it keeps getting stronger and stronger,” he said. “You can always make things run. If there’s a need, someone will fill it.”

One of Egge’s other calling cards is that it’s stayed in the country while some competitors have moved offshore. The company brags it’s the last cast piston manufacturer in the United States. Today, most pistons are forged instead of cast in a mold even though most classic cars originally used cast pistons.

The company has considered moving offshore, Silver said, although the discussion never gets very far.

“We like those bragging rights, and we can control the quality here,” Silver said. “We’ve been doing it for 95 years, American-made, and why would we stop?”

Bob Egge stares downward as he adds his two cents:

“It’d be almost like giving up a birthright.”

Egge Machine Co.

HEADQUARTERS: Santa Fe Springs

CHIEF EXECUTIVE: Ernie Silver

FOUNDED: 1915

CORE BUSINESS: Manufacturing engine parts for classic cars

EMPLOYEES: 38

GOAL: Expand into market for vintage suspensions

THE NUMBERS: Revenue of $3.7 million in 2009; projecting $4 million in 2010

No posts to display