The Carroll Hall Shelby Trust - Exclusive Interview
An exclusive interview with Shelby American CEO Joe Conway and Shelby Licensing CEO Neil Cummings
Carroll Shelby was a smart man. When he left this world in 2012, he left people in place to run his businesses. Carroll chose Joe Conway to run Shelby American and he chose Neil Cummings to run Shelby Licensing. These two companies are wholly owned subsidiaries of Carroll Shelby International, a publicly traded company with the stock ticker symbol of CSBI. Conway and Cummings serve as Co-CEOs of CSBI.
Shelby American manufactures and sells cars and parts. Shelby Licensing is the brand name’s intellectual repository with over 150 licensees selling a wide range of products across America and literally the world.
I interviewed Conway and Cummings in a joint conference call recently to answer questions Shelby fans have been asking since Carroll died. My focus is to set the record straight on key questions. Did somebody inherit his companies? Will Shelby American continue to build new cars? How did Carroll divide up his estate? Who got his stuff?
I knew Carroll for over 30 years. He once told me he wanted to live to 125. Then, he flashed that mischievous grin. I think he believed he could go on for many years, as long as he could keep getting “spare parts.” He had already received a heart and a kidney transplant.
Carroll is gone, but his companies live on and thus his legacy. Carroll always said his favorite car was his next one. He set up his trust to make sure there is a next one. Today, Cummings and Conway are taking their directions from Carroll Shelby, despite the fact he has died. In essence, the trust has become Carroll.
Mustang Monthly: Would each of you tell us how you met Carroll Shelby, your association with Carroll Shelby?
Neil Cummings: I first met Carroll in 1991. My background is as a business trial lawyer. I handled a number of cases for him, including the lawsuit against Brian Angliss and AC Cars. In the course of that lawsuit, I quickly got into the business side of it. I also have a business degree from Berkley in addition to a law degree. I started meeting with Carroll at the Bel Air Country Club at “The Smart Table,” so called because everybody there is smarter than the other guy. Carroll would hold court there just about every afternoon, telling stories and entertaining everybody. In between the stories, he and I would talk a little business, and then he would go back to telling stories. So, we became friends as a result of that whole experience.
I’ve had my own law firm for 20 years and before that I was a partner in a law firm for 15 years. So, I’ve got a lot of business experience and acumen, plus my legal background. I was a car fan; I was a racing fan in the ’60s, and in the ’50s. I remember watching Phil Hill and Parnelli Jones race. I knew who Carroll Shelby was back then. I wound up being involved in a very interesting way with the most famous and charismatic race car driver, then designer, then manufacturer in American history.
Joe Conway: I met Carroll back in 1969 or 1970. I was attending the University of Texas at Austin and dating Carroll’s niece, who was attending also and working on her math and computer science degree. One day I was at his sister’s house in Ft. Worth and Carroll dropped by in a whirlwind—in and out. He would always do that. He would run in for a few hours and he was off to something else. He was always on the go. I’ve known Carroll for about 45 years. I married his niece, and we’ve been married for approaching 44 years now.
When I got my degree in chemical engineering, I went to work for Dresser Industries in Dallas. I started out doing engineering, working with turbines and compressors, and so forth. I really didn’t care for engineering work all day long and was fortunate to get into the business side. I worked my way up to be president of a division.
In 1992, I set up my own company, JEC Consulting. I would go out and find companies that were in need of financial/operating turnarounds. In those days I wasn’t into cars. My wife, Carol, was. She drove a little ’66 Mustang to school. But, I enjoyed being around Carroll and I got into cars by osmosis. I saw Carroll through the years at family reunions, hosted a lot of times at his place, either at Holly Springs or the house in Pittsburg [Texas]. He knew what I was doing. In 2001, he started quizzing me about coming out and trying to help him. In 2002, I ended up in California as president of a company. I was on his turf now, so he started really pushing me to go to work for him.
In 2009, I retired and went to work for Carroll to “clean up” as he said, his messes, and look over the ranch in Texas and Shelby American in Vegas and all of his personal businesses/affairs. Carroll thought I could do that from Austin [Texas], where I live. However, the complexity of Carroll’s personal businesses was such that I found it impossible to live only in Texas and ended up with an apartment in California [2009 until 2012] close to Gardena where I had access to historical and current files. Additionally, this provided me immediate access to Carroll for input on a daily/weekly basis. These were exciting times, as Carroll was full of ideas and boundless energy. I had to tell him more than once to please let me get one project finished before coming up with three more. I had never worked for a man with nearly perfect recall right up until death who knew exactly what he wanted. It was truly amazing.
MM: So, each of you is a CEO, how did that happen?
NC: We were both officers and board members of Carroll’s companies before he [died]. Carroll designated us as co-trustees of his trust. When Carroll [died], part of his instruction was that we carry on for him as best we could as co-trustees of his trust, which in essence is Carroll. Carroll was the CEO of these companies, of course, when he was alive. So, we stepped into Carroll’s shoes at his request, to serve as co-CEOs of Carroll Shelby International, which is the holding company of his two businesses, the two companies that Carroll had been operating since the ’60s—Shelby Licensing and Shelby American.
MM: Are you perpetuating Carroll Shelby’s legacy, in a business manner of speaking?
JC: Yes, we stepped into his shoes to carry forward his decisions and his legacy, with Shelby American and Shelby Licensing.
MM: How does “The Carroll Shelby Foundation” (formerly known as “The Carroll Shelby Children’s Foundation”) fit into Carroll’s businesses?
NC: The Carroll Shelby Foundation is a nonprofit tax-exempt IRS Section 501(c)(3) public benefit corporation, which relies primarily upon donations from the public. The Foundation is of course not a business owned by Carroll or his Trust, but is the ultimate beneficiary of Carroll’s estate. The Foundation shall continue to support its nonprofit purposes (funding for medical procedures for children and young adults in need; educational purposes; support of the Shelby Automotive Museum, a separate 501(c)(3) nonprofit public benefit corporation). The Foundation is expanding its outreach to other like-minded nonprofits, such as the Christmas toy drive and fund-raiser with the Eli Home for Abused Children last December. The Foundation has also recently entered into an agreement with Reily Foods to license back the Shelby name for certain food products (e.g. nuts, olive oil, and vinegar) which will serve to indirectly carry on Carroll’s great love of cooking and, in particular, the chili business he sold to Kraft, which is now owned by Reily Foods. It is hoped that these food products will further support the Foundation, which of course Carroll founded in 1991 after his successful heart transplant as his way of giving back to those who cannot afford such a procedure, particularly children.
MM: You are both CEOs and both trustees of CSBI. As trustees, did Carroll appoint the two of you to administer the affairs of CSBI for the benefit of stockholders?
JC: Yes, the best way to look at the trustee position is as the majority shareholder of CSBI, as Carroll was the majority shareholder when he was alive.
MM: What happened to Carroll Shelby’s stuff? Who did he leave his company to? Who did he leave his estate to? Who got his belongings—his wife, his children, the foundation?
JC: During his lifetime, Carroll gifted some of his personal items to his children, to his grandchildren, to family members, and to others. But, there’s a lot left over that we have. As a matter of fact, to pay tribute to Carroll we are creating the Carroll Shelby Automotive Museum at the Gardena, California, building, the same place where Carroll was for 40 years. This is what he wanted.
NC: Ten years ago, Carroll Shelby formed, as a non-profit, The Shelby Automotive Museum. It’s going to be a fantastic tribute to Carroll and motorsports, and the whole muscle cars of the ’60s to the present. Even the memorabilia and things he has gifted to people may wind up donated back to his museum.
MM: So the actual businesses, under CSBI—Carroll Shelby International, which is a publicly traded company—went to a trust. And that trust is now under the direction of Joe Conway, CEO of Shelby American, and Neil Cummings, CEO of Shelby Licensing?
JC: No, Carroll’s trust was a majority shareholder and that stock remains in the trust.
MM: Anybody can buy shares in CSBI, and CSBI owns Shelby American and Shelby Licensing?
JC: Yes, the company stock trades as a pink sheet. The pink sheet is an electronic system that allows broker-dealers to trade stocks over-the-counter (OTC) rather than on an exchange, such as the New York Stock Exchange. There are no requirements to be listed on the pink sheets, as there would be with an exchange, and companies aren’t regulated by the Securities & Exchange Commission. Pink sheets stocks (which got their name because quotes were originally printed on pink paper) can potentially be a good investment if they’re clearly understood.
MM: The Shelby trust owns 85 percent of CSBI outstanding shares—39 million of 45 million. Any chance the trust will sell off shares so more people can own a piece of the company?
NC: We don’t anticipate giving up a majority interest anytime in the near future. Carroll wouldn’t have wanted us to do that. We’re taking our instructions from Carroll. He may be gone, but he’s still telling us what to do.
MM: After your long association with Carroll Shelby, you must have a pretty good idea what he wanted?
JC: Well, we should. Neil was with him all those years. And the past 10 years Carroll has been talking to me, prior to me coming to work full time in 2009. Neil talked about The Smart Table. I used to meet Carroll at Bel Air Country Club on Saturdays and Sundays when I was in California from 2002 to 2009. Carroll was always trying to pick my brain and ask me questions about his businesses, how I would structure, and what kind of person would I bring in. Of course, it would always come back around to pushing me to go to work for him. And eventually I did. Carroll was a strong personality. He was a very smart individual. He had an unbelievable mind, as far as detail.
NC: Yeah, it was funny. Carroll was always the chicken farmer, good old country boy. But, he was really kind of a genius mentally. He knew so much about so many things, it was staggering. At The Smart Table, there were many Bel Air members talking every conceivable subject. Everybody was showing how smart he or she is. And Carroll knew something about everything that was talked about.
MM: I remember taking pictures of an electric-powered Cobra in his shop. This prototype was hush-hush, so I couldn’t write anything about it. He wanted to be at the cutting edge of technology was my impression.
NC: He built a hydrogen-powered Cobra in 1998. He was talking about electric cars and carbon-fiber bodies in the early ’90s.
JC: Before I went to work for him, Carroll would call me and try to set me up with people to engineer a lithium-ion battery.
MM: How is Shelby American’s association with Ford looking today?
JC: Ford wants us to continue on. We’re a nimble entity that can take a Ford base car and add some performance to it because we can do it faster without going through all the rigors that a large company like Ford goes through.
MM: As with other licensees, Ford Motor Company pays Shelby Licensing a royalty when Ford sells a Shelby G.T. 500?
MM: What are Shelby American’s immediate business plans? Carroll told me a few years before he died that he wanted to expand the parts division and sell a limited run of Shelby cars.
NC: A division of Shelby American is called Shelby Performance Parts and it’s been going on for four to five years now and it is getting bigger and bigger. The direction of the company is continuing to do these awesome aftermarket products, as well as build Super Snakes and upgrades to Mustangs.
JC: Shelby Parts was pushed hard prior to his death and we’re continuing that process along with the cars. You need both to make the business financially solid. In addition to Mustangs, we’re doing the Raptor truck and Shelby Focus; we continue to build Cobras, and we also have a new licensing deal to bring back the Series 1, but as the Series 2.
MM: That’s pretty big news. Would a Series 2 utilize the same Series 1 body, but with a Ford engine? (Editor’s note: The Shelby Series 1 was a two-passenger roadster that Shelby American built from the ground up as a 1999 model using an Oldsmobile Aurora 4.0L DOHC V-8. Just 249 were made.)
JC: Yes, and we would be licensing another company to do this program.
MM: The Series 2 would come from Shelby Licensing?
JC: Yes, licensing has over 150 licensees and continues to expand. This is where the intellectual property resides and that is the mother lode of the whole thing, to license the Shelby name, the Shelby marque, and register the marques worldwide.
MM: Where can we expect Shelby American to be in 5 to 10 years?
JC: I think you can expect them to be where they are now, but the legacy of Carroll will be bigger than ever. We’re going to be the lean, mean machine working with Ford to provide performance value to their cars. We don’t see it being a different company. It will be the same company. We’re going to continue on with what we are doing.
NC: Definitely in automotive, but we’re expanding into many different areas. Carroll has a huge reputation in Europe, as you know. People just like Shelby. They like what it stands for.
MM: People are always conjecturing that Ford Motor Company is going to buy out Shelby American.
NC: That was not Carroll’s plan or Ford’s plan to do a buyout. There’s a close history and mutual respect that the two companies have for each other, Ford and Shelby. But they are separate and distinct animals. What Shelby brings to the table is really different from what Ford Motor Company brings to the table. They are both great, but they are different.
JC: We like it that way and Ford likes it that way.
NC: And Carroll liked it that way. All this speculation Ford is going to come in and buy us out—no, it’s not going to happen. We’re doing real well the way we are and there is no mechanism that would enable that to happen, without mutual consent, of course.
MM: So it’s business as usual for Shelby American?
NC: The model set forth in the ’60s is still the model today, no pun intended. Ford makes base model vehicles and Shelby does performance upgrades and makes them a little racier.