Tuner running losses of millions, and dealers not happy.
Legendary Mustang tuner Saleen is facing a growing crisis as it battles a number of lawsuits and losses of millions.
Red McCombs Ford of San Antonio, Texas is suing Saleen, alleging fraud and breach of contract, after three 2015 Mustangs it ordered from Saleen arrived six months late and missing $22,000- (approx. $28,600 CAD)-worth of upgrades. The dealership has been unable to obtain a refund for the missing options and floorplan expenses.
Meanwhile, Friendship Ford in Bristol, Tennessee has been waiting more than a year for the "Yellow Label" Mustang it ordered from Saleen. The car was originally supposed to be delivered late last year, then in early June of this year. Friendship Ford has yet to receive the car, indeed its current whereabouts are a complete mystery.
Saleen's history dates back to 1984, but the current Saleen Automotive company was formed in 2011, following a lengthy legal battle for founder Steve Saleen to regain the rights to the Saleen name. Since then, the company has been in constant financial trouble, only turning a quarterly profit once, in 2014. By the end of that year, it was dire straits, listing just $7,261 ($9,430 CAD) in "cash on hand."
At the end of 2015, Saleen's filings showed assets of $745,755 (approx. $968,000 CAD) with liabilities of $11.4 million (approx. $14.8 million CAD). Additionally, $1.3 million (approx. $1.7 million CAD) of accounts payable were over 90 days late and, as of March, it owed more than $400,000 (approx. $520,000 CAD) in rent.
Total reported revenue for 2015 was $3.8 million (approx. $4.9 million CAD), with losses of $8.5 million (approx. $11 million CAD). Red McCombs' claim for $30,000 (approx. $39,000 CAD) represents half of Saleen's cash reserves.
Saleen's most recent quarterly report stated: "These factors raise substantial doubt about the Company's ability to continue as a going concern."
Steve Saleen himself was defiant, saying: "There's a reason why there aren't a lot of companies like us that do this, but for us to have been doing it every model year as long as we have, we must be doing something correctly. Year over year, we have been improving. As with any company, we continue to need capital."
Source: Automotive News