Who's Who: Scott Atherton, CEO of PMSG

The head of the Panoz Motor Sports Group explains why his company's holdings are important to American business

Panoz Motor Sports Group (PMSG) is a finely-tuned mix of workmanship and modern technology. It has become one of the most encompassing motorsports corporations in North America. And it originally started out as a "For the Fans" racing series!

In 2000, Don Panoz chose Scott Atherton to steer the American Le Mans Series he founded in 1999. Now Atherton oversees the entire Panoz Motor Sports Group as the president and chief executive officer.

In August of 2000, when Atherton accepted the challenge to steer the Le Mans-style sportscar series, he came prepared with a background in both motorsports and in business. "I was hired specifically to be in charge of the American Le Mans Series and that was, for the first year or two, my sole focus."

Atherton quite honestly admits that he did not expect to end up where he is today. "When I started, the ALMS staff consisted of myself and an assistant -- just the two of us in the office. At the time, the series was, I believe, two years old. It had been administered by Bill Donaldson, who did an excellent job. Bill's job was to secure freelancers and consultants -- basically hired guns, so to speak, to fill all the important positions of running a racing series.

"Operating literally via fax machines and telephone calls, they would only meet at a race and that was how it was being done. There was no staff, no infrastructure," he explains. "And when I look at what we have today... it is the other extreme and yet we are still a very lean, mean operation by comparison to IRL, Champ Car, Grand-Am. But it is still light years better and more structured than it was. I look back and I don't honestly know how they did it."

Atherton's position now goes far beyond the racing series founded by the company's owner. The hats Atherton wears are no different than the ones worn by CEOs of major corporations worldwide, since he oversees a variety of entities owned by PMSG.

Beyond the American Le Mans Series, PMSG's holdings include three racetracks, Elan Motorsports Technologies (EMT) and the Panoz Racing Schools. In this part of my chat with Atherton, we focused on EMT.

"The company known as EMT is really an umbrella company itself in that it has several divisions. And collectively they represent the manufacturing side of PMSG," states Atherton. "That division is headed by David Bowes, who has done an outstanding job. The facility just recently became ISO9001 certified, which will enable the company to continue the diversification that has already been achieved. EMT has already worked outside the motorsports industry. One example: we build very high-tech and sophisticated carbon fiber satellite dishes, currently working with a company that is connected with the defense industry. This type of satellite needs tolerance factors... very similar (to) those of a race car."

The four divisions of EMT are:

• Elan Power Products, where "racing engines for all kinds of applications are built and developed".

• Elan Composites, the carbon fiber composite business, "which builds all the composite race car tubs (chassis) for ... our IRL chassis business as well as other applications, such as the Star Mazda car which we manufacture, and SCCA spec cars, which are tube-frame."

• Elan Precision Engineering, which "is really a fabrication company that works primary with steel and aluminum fabrication (on) CMC machines as well as (doing) very sophisticated, complicated one-off fabrication work. I think of those fabricators, literally, as artisans in the talent that they have."

• Van Diemen, based in the United Kingdom. This group is best known for producing amateur race cars. "They literally invented the Formula Ford category and continue to be a very strong brand name and consistent supplier of relatively inexpensive race cars for amateurs, both young and old alike, who want to participate in auto racing: some who aspire to be professional racers and some who want to enjoy racing as a hobby."

Why would Don Panoz, who had a racing series and his own prototype team, form EMT? "The original motivation for launching EMT was Don's frustration at being a customer and some of the experiences he had as a customer in buying engine support and technology from others," Atherton says. "To control his own destiny. So it really started as a service entity to specifically support Panoz Motor Sports efforts."

Once they had "the infrastructure, they found themselves sitting on this incredible investment. In our case (this) was the machinery, technology and personnel. Because the people to operate the machines, to fabricate race cars and do all the things that EMT does, are not easy to find. This is not something you put on monster.com and wait for the resumes to flow."

To move beyond production of Panoz Motor Sports racing cars, the company needed to find staff -- the artisans, the engineers, the technical experts -- and for PMSG, that was not too difficult.

"We originally started with most of the staff coming from Europe since the other element of EMT is that it owns Van Diemen, so that gave EMT a great base of operations in Europe and the ability to take a lot of learning from the procedures and the business practices of Van Diemen and to apply it to its own business.

"Being a low cost producer of race cars is in some (ways) an oxymoron, since racing by its very nature is not known as low cost. But on a relative scale, compared with other manufacturers, Van Diemen is ... very cost-efficient at producing low cost race cars."

While EMT was formed to support Don Panoz's racing team, it also took on development of the Panoz Racing Schools GTRA cars and the SCCA GT2 spec car. It also provided technical support for Panoz Auto Development, the road car company headed by Danny Panoz.

In 2005 Bowes, Atherton and EMT did something shocking -- they challenged the reigning open-wheel chassis manufacturers. EMT made a bid on the right to design, develop and produce the 2007 Champ Car World Series racing car, looking to replace Lola, who holds the current contract. EMT already held a license to supply teams in the rival IRL IndyCar league with a Panoz chassis. But becoming the exclusive supplier to Champ Car was, as Atherton puts it, "...very difficult to land, supremely competitive as we knew it would be...I believe that there were nine companies that received bidding packages."

The result was even more shocking -- to other manufacturers. EMT landed the contract, and used the company founder's initials to name the new Champ Car chassis the DP01. "What really needs to be understood here is that there has literally been a paradigm shift. Historically anyone that was involved in auto racing at this level, especially in open-wheel racing, accepted the status quo: in order to get true technology and a true competitive car... built to current specifications that would exploit the existing technologies (and) that would be literally at the cutting edge ... the only way to do that was to go to Europe and, in particular, go to the UK. Because that is where the vast majority, if not all, the race cars were coming from.

"And this is not just old thinking. It doesn't go back 20 years ago. It goes back just two years ago, and this was one of Don's frustrations when he wanted to go racing for the first time. Why was the US the world leader in aviation and in many respects automotive technology in passenger cars and aerospace (the space shuttle) and yet, in order to get a race car, you had to go buy it somewhere in Europe? The motivation for EMT was probably equally that -- why can't we here in America be competitors and contributors to auto sport technology?"

Atherton explains why the new challenge EMT has taken on is not only important to EMT but to American business as well. "The paradigm shift that has occurred here is suddenly EMT has become the world leader and provider of cutting-edge leading technology in the form of open-wheel race cars. Currently we are suppliers (one of two, the other being Dallara) to the IRL and we earned fair and square, and for all the right reasons, the award of the RFP for the next generation Champ Car. We are the manufacturer of record of the Star Mazda chassis, we are the manufacturer of record for the SCCA Spec formula car.

"So in the period of literally two years, the US has become the world leader in high-end open-wheel race cars. And we have taken that business away from long-standing, historically very significant European manufacturers and we earned this the old-fashioned way."

Atherton is very pleased with the latest development for the company: "Not that long ago, it would have been unheard of for an American company to win an RFP for a spec racer like the next generation Champ Car. The fact that Panoz was successful in that, well, if you were in Europe, it (was) the shock heard around the world."

In Part 2 of our interview with Scott Atherton, we will focus on the other entities owned by PMSG, including its racing businesses and how they interact with world motorsport governing bodies.

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