Is Shelby Really This Awful To Its Dealers?

Stephen Becker, owner of Planet Cobra, an authorized reseller of those "new" Shelby Cobras old rich accountants love is alleging Shelby American engaged in numerous unscrupulous and underhanded practices with its dealer network in a lawsuit obtained by Jalopnik. The lawsuit also reveals just how much dealers pay for the Cobras they sell to customers seeking a piece of Shelby history.

The Cobras in question are official reproductions of the original, AC-bodied Cobras from the '60s, one of the absolute great sports cars of all time. Taut, curvy British styling with gutsy, reliable Ford power, these things have been nocturnal-emission fodder for gearheads for half a century. They are absolutely desirable, iconic cars. That said, one thing they are certainly not is complex, in any modern manufacturing sense. Yes, they're mostly made by hand, but that's got more to do with their very low-volume production than some old-world craftsmanship ethos. They're built, essentially, like kit cars. That's not a condemnation of quality, just the nature of the vehicle.

The process for building a Cobra Component Vehicle ("Component Vehicle" is basically a fancy name for "kit car") is as follows: the bodyshell is manufactured out of aluminum or fiberglass by South African contractor Superformance. Even though "Shelby African" has an interesting ring to it, the cars are shipped back to Shelby's Nevada factory for final assembly.

For the record, the dealer price for a Shelby Cobra is $41,200. For the fiberglass 50th Anniversary edition, the price is $65,005, at least for the single delivered one; the undelivered (though allegedly paid-for) fiberglass Cobras are $61,995 and $63,945. The 50th Anniversary Cobra lists for $69,995, giving about a 12% margin, which is pretty standard for the industry. The aluminum 50th Anniversary Cobra costs the dealer $119,995 and ordinary chumps like us $134,995, giving roughly the same margins. It is nice of Shelby to knock off that $5 from all those prices, though.

That's the general process; the primary issue alleged in the complaint is that Shelby American doesn't seem to actually want to build and deliver cars to at least this one particular dealer. For example, in the case of the five Shelby 50th Anniversary Cobras ordered by Becker, only one has been delivered, even though all cars have been paid in full. The delivery of the single car was late as well, as the desire was to have all the anniversary cars delivered before the end of the anniversary year, 2011. That didn't happen, according to the documents.

Is Shelby Really This Awful To Its Dealers?

Additionally, Becker claims that Shelby America did not provide him with a contractually-agreed display vehicle, or any of the agreed support for advertising.

The biggest issue seems to be in the actual delivery of completed, paid-for vehicles, however. From 2007-2010, Becker's firm says they ordered and sold 49 Cobras; after 2010 things seemed to change. Of the 12 vehicles Becker ordered since then, the suit alleges only four have been delivered. Becker also claims that new, higher prices were demanded in breach of the contract, and his belief is that the other vehicles aren't being produced in the hopes he'll cancel his order and Shelby will be able to sell the cars at the newer, higher prices.

The complaint also alleges that Shelby, again in violation of contract, began to demand full payment for vehicles while they were still in the South African assembly facility, instead of the usual $15,000 deposit.

If these allegations are true, it would point to, at best, a very adversarial relationship between Shelby and one of its dealers, and at worst a deliberate effort to put dealers out of business. Though it certainly doesn't dictate this current situation, Shelby's past is a bit checkered, including charges of use of prison labor and craploads of Bondo.

In one particularly unpleasant-sounding section of the Complaint, Becker alleges that Shelby America was in a "cash bind" and requested his help by paying in full for Cobras that were near completion, but not yet delivered, something which was not required by contract. Becker paid in advance for four cars, thinking that Shelby America could be in danger of going out of business, and this action would help.

Shelby America then immediately sent invoices for four more cars "demanding immediate payment of $124,922.00, even though the four Cobra CVs had not even left the South African vendor," states the Complaint. When Becker refused, Shelby America responded that Becker waived any such right to refuse when he paid for the initial four cars in full.

The contract summarizes

…[Shelby America], in other words, pressured [Becker] into paying in full for four of the items, then called [Becker's} payment a waiver for all future purposes. [Shelby America's] claim is wrong. The Agreement states that "The failure or delay of either party to enforce at any time any of the provisions of this agreement shall in no way be construed to be a waiver of such provisions"

If these allegations are proved true, that is indeed some shitty behavior.

In response to these allegations, Joe Conway, President of Carroll Shelby International, told Jalopnik:

The press release issued by Planet Cobra is a libelous document issued by a dealer who entered into a dealer agreement with Shelby American over four years ago and made substantial profits on orders for Cobra vehicles. Now unfortunately he finds it necessary to sue after Shelby demanded payment on past due invoices.

In 2010, Carroll Shelby personally made a substantial personal loan to Mr. Steven Becker, the owner of Planet Cobra, to help him meet his financial obligations. If Mr. Shelby were alive today, he would be terribly disappointed with Mr. Becker.

Shelby American will vigorously defend the fictitious claims set forth in Planet Cobra's press release and lawsuit, which reads like it came from a different planet.

Extra-terrestrial origin or not, these are serious charges; the Complaint suggests that other Shelby dealers have been treated similarly, though this, like all of the complaint, is as yet unproven.

Shelby is a legendary American marque and one of the relatively few small-scale specialist auto companies still around. We've heard bad things about Shelby's business practices for years and if these charges are proven true it'll be another knock against a brand many of us love.

Becker v Shelby Complaint