NUMOA MEMBER SPOTLIGHT
February’s Member Spotlight is on Jon Wilhelm. Jon joined NUMOA a little over a year ago, after meeting up with Don Bartholomew, sitting at the NUMOA table at the 2008 International Auto Expo. Jon has a 35-year love affair with the Ford Mustang and has had much involvement with some of its more storied personas.
To start Jon’s story, let us say that he is the visionary/whack-job who took 20 years to concoct a plan to take vintage Ford Mustangs, restore them, and license them as Continuation Shelby Mustangs. While watching the cost of Shelby Mustangs (or rather GT350s and GT500s) skyrocket, Jon carefully plotted his plan. He reasoned that if a restored Mustang was worth about $30,000 and a Shelby in the same condition was worth about $110,000, then wouldn’t there be room to make a continuation car to sell in between those two amounts? In June of 2002, Wilhelm met with Carroll Shelby’s National Distributor to put this plan in place. Carroll Shelby readily accepted Jon’s idea, and the project had its snake charmer. They all agreed that additional cars could be added to the Shelby American World Registry in much the same way that Carroll had added about eight 1966 Mustang convertibles back in 1984. The next step was to find adequate manufacturers to bring this idea from the dream stage to production. In July of 2002, Jon Wilhelm met with the partners of Unique Motorcars, Inc. to discuss the possibility of joining forces to begin producing Continuation Shelby Mustangs. Jon drew up some contracts; the plan was executed, and production of the G.T.500E (Eleanor) soon began. While Jon wanted about 30 such companies building cars for him, Unique violated the terms of its contract and went directly to Shelby for a manufacturing contract. Wilhelm still had his exclusive marketing rights through the National Dealer, so a very odd triangle was formed by Shelby that eventually led to the demise of the entire program. But we are getting ahead of ourselves!
Jon Wilhelm is a native of Southern California. His early childhood was spent in Pomona, where his grammar school was in earshot of the NHRA Winter Nationals drag racing events. He longed for the day that he could own one of these new Mustangs that were becoming so popular in the mid 60s and someday be involved with the horsepower that he could hear wafting through the schoolroom windows. At age 8, he proclaimed that he wanted to be involved in manufacturing American sports cars. 35 years later, that goal would be accomplished.
Most of Jon’s life and professional development was spent in preparation of the moment he could give flight to his dreams of manufacturing muscle cars. Jon’s first car, purchased just before his 16th birthday with money he earned from working in the fast food industry (in Orange County, CA), was powered by a nimble engine from a ‘67 Ford Mustang. Over the years, Jon has owned and restored many, many Mustangs. In high school, he opted out of his senior year and went to France to be a foreign exchange student. He mastered the language and spent his time with several French racing enthusiasts, attending many noteworthy races, such as the Grand Prix of Monaco. His year in France ended with a major racing accident, in which Jon nearly lost his life. His brush with speed and death made him very concerned about the safety aspects of the auto industry.
Accepted into a BYU Master’s Degree program at age 18, Jon declined the honor for a more conventional education. In 1982, he earned a Bachelor of Arts degree from BYU in French and a Bachelor of Science degree in economics. In 1984, he earned a Master’s Degree in Business Administration from USC with an emphasis in marketing and decision systems (MIS). In 1990, he added the license of CPA to his growing pile of wallpaper. Today, he is a partner in Paramount Tax & Accounting CPAs (www.PTACPA.com) in Salt Lake City.
Over the years, Jon has consulted many small to medium sized businesses. He has raised millions of dollars in capital and has served as a CFO among publicly traded companies. More than his experience, however, is his love and understanding of Mustangs, both as a vehicle and an economic force. He studied the market for years, watching for the right time to proceed with his plans. His combination of vehicle knowledge, Shelby history, accounting expertise, manufacturing experience, education, and business know-how all came together in this venture.
After originating and founding the Continuation Shelby Mustang Program, Jon Wilhelm was removed from the Project through a series of aggressive business moves. It was taken over by the “rogue sub-licensee”, Unique Performance (UPI). In 2004, Jon Wilhelm tried to negotiate with UPI to partner up with them to build a bigger and better company. Negotiations stalled, and Jon went back to Shelby to ask for a reinstatement of his original contract. The Shelby Organization refused to help him. CSL insisted that Jon needed to file a lawsuit to regain the contract that Unique had stolen. On January 21, 2005, Jon Wilhelm filed a $50 million suit against Shelby for the loss of his contract. Shelby’s attorney asked for an extension to reply, which Wilhelm readily granted. That time lapsed, and Shelby’s attorney asked for another extension, and Wilhelm readily granted it a second time. That time lapsed, and Shelby didn’t ask for another extension. At this point, Wilhelm filed a notice of default. Within a week, Shelby issued Jon Wilhelm (dba Wilhelm Motor Works) the largest contract Shelby had ever written. Specifically, on June 3, 2005, Jon Wilhelm received the exclusive rights to manufacture an unlimited number of the C (convertible) and CR (convertible retractable) models for all vintage Mustangs, along with merchandise, parts, and memorabilia.
Again, Wilhelm launched himself into a full-scale press to complete several prototypes and begin the marketing process of these exciting products. By mid September 2005, Wilhelm had three G.T.350C prototypes nearly complete. And then a strange thing happened: The Shelby Organization refused to approve the prototypes for manufacturing. Looking back, Wilhelm hoped that it was for some technical flaw that they didn’t like (though he knew the craftsmanship was superior to any continuation Mustang previously offered). Unfortunately, the problem was much deeper. The contract between Wilhelm contained a “Silver Bullet” for Shelby, stating (paraphrased) that Shelby Licensing must approve a product before it can be sold; the licensee cannot pay royalties on the product until it has been approved; and finally, if there were ever to be a lawsuit, Shelby would only be liable for the amount of royalties paid! So, Shelby did the unthinkable: They refused to approve anything; Wilhelm could not pay a royalty; and Shelby would have a liability of zero (if found guilty), because no royalty had ever been paid!
In late 2005, Wilhelm continued to build cars, and Shelby eventually slapped a restraining order and lawsuit on Wilhelm. Wilhelm countered with a $250 million suit and won 4 ½ of the 5 claims. Among other things, Shelby was found guilty of violating the implied covenant of good faith and fair dealing – a fraud. Wilhelm was found guilty of selling two T-Shirts with 4 Shelby logos on them. Although Wilhelm and witnesses argued that they had verbal approval to do so, the facts were that he sold two shirts for $25 that did not have written approval. A jury found that Wilhelm’s act of selling 2 T-Shirts was equal to Shelby’s act of fraud (and other counts), which led to the demise of their largest contract. The jury awarded each party $250,000, making a mockery of the more than $600,000 spent just in legal fees!
Jon Wilhelm’s current vehicle, the CR350 was completed as a Wilhelm Motor Works’ product, though it was started as a Shelby prototype, under a Shelby contract. It was to be the G.T.350CR (convertible retractable). Instead, Wilhelm side-slipped Shelby’s trademark and called it the CR350. Most of the prototypes for Wilhelm’s latter project were completed at The Restomod Shop, owned by Mustangs Plus in Stockton, CA. Three of the G.T.350C prototypes can be seen in The Restomod Shop’s showroom. Only one retractable prototype was built, and it is the blue and orange 1964.5 that has been shown at a couple of the NUMOA events.
This CR350 was basically a junkyard rescue. The car had not been driven in nearly 10 years. Originally a 6-cylinder, San Jose car, it had very little rust or structural damage. However, not a single part could be used without extensive work. Wilhelm incorporated a retractable kit originally designed by Ben Smith, designer of the 1957 through 1959 Ford Skyliner. Mr. Smith built a single prototype Mustang retractable in 1966 that Ford ultimately rejected. Years later, Mr. Smith started a company to build these retractables from common and plentiful Mustang Coupes. Approximately 75 kits were sold, and it is uncertain as to how many of these cars were ever completed. In 2005, Mr. Smith sold his business to Mustangs Plus.
The kit offered prior to Wilhelm’s involvement had a “Lincoln Continental” flair. The rear deck lid (trunk) had an overhang, reminiscent of a spare tire compartment, and the roof was squared off to resemble a “limo” look. Jon Wilhelm redesigned the deck lid to have a more vintage Mustang spoiler, while still being able to retain the added trunk space required for the folding roof. In addition, the roof of the car was redesigned to have a softer, more convertible appeal. The plugs (redesigned parts) were used for fabricating molds (which Wilhelm owns), making it possible for the pieces of this car to be made from carbon fiber. This lighter material enhances the manual maneuvering of the roof and trunk.
Other special features in the styling of this prototype include ground effects, a custom interior, trimmed side scoops, shaved light vents, medium front air dam, and a unique shaker hood. The badging incorporates a mark on the front bumper, reading “P4”, which signifies that this car is the 4th prototype Mustang that Wilhelm has caused to be completed as a Wilhelm Motor Works vehicle. The first three were convertibles (G.T.350C) commenced under the Shelby license, and they were built at The Restomod Shop in Stockton, CA. Jon’s current plan is to promote this vehicle for about a year, and then sell it at the Barrett-Jackson in Scottsdale next January. Oh, and as for Unique Performance? They either built or had contracts to build about $300,000,000 in Continuation Shelby Mustangs before they were shut down by State and Federal Authorities for alleged tampering of vehicle identification numbers.
Many companies and individuals have participated in the completion of the CR350 with parts and labor. Wilhelm Motor Works is grateful for their involvement. In random order, they are: Old Air Products (vintage-style air conditioning system), Mustangs Plus, House of Kolor (paint), Keith Kaucher Design Werks (design and consulting), TMI Custom Interiors, Spin Tech (Mufflers), Ultima Batteries, JBA Headers, Gold Star (reproduction metal Mustang parts), Canton Racing (engine parts), Ron Morris Performance (engine parts), Gary’s Custom Lights, Quiet Ride Solutions (interior insulation), NorthWestMustang (LED lights), Stainless Steel Brakes, Allstar Performance (lights), Ring Brothers (hood hinges and fasteners), Auto Custom Carpets, Pertronix (Flame Thrower II ignition), Be Cool Radiators, TCI Auto (Outlaw Shifter and drivetrain parts), RetroSound (stereo), RetroBelt USA (seatbelts), Painless Performance (electrical), The Restomod Shop, Lokar (engine parts), Quick Fuel Technologies (carburetor), Randall’s Racks, Lundy & June Smith, Gus Trupiano, Glenn Thomas, and Ron Bramlett.
FEDERAL COURT UPHOLDS JURY VERDICT THAT SHELBY BREACHED LICENSING AGREEMENT WITH WILHELM MOTOR WORKS
WOODLAND HILLS, CA – May 22, 2007 – Carroll Shelby Licensing, Inc. received a setback in its ongoing lawsuit against Jon Wilhelm and Wilhelm Motor Works, when a federal court judge recently upheld the jury verdict of last January that Shelby breached its licensing agreement with Wilhelm. The same jury had also found that Shelby breached the covenant of good faith and fair dealing concerning its contractual dealings with Wilhelm. Shelby had attempted to overturn the jury’s verdict, arguing that Jon Wilhelm had tried to find a work-around after Shelby ’s breach, thereby negating Shelby ’s egregious behavior. The Quintana Law Group, attorneys for Wilhelm, argued that no legal or factual basis existed on the record to upset the jury’s verdict as to Shelby ’s breach of contract. The federal judge ruled in Wilhelm’s favor.
The Shelby vs. Wilhelm case went to trial last January. The case involved a license agreement given to Wilhelm by Shelby to convert an unlimited number of Ford Mustangs, bearing the Shelby name and marks (G.T.350C, G.T.500C, G.T.350CR, G.T.500CR – for convertibles and retractable hardtop Mustangs) along with associated products and memorabilia. Five causes of actions went to the jury, which returned a verdict on January 30, 2007 . Wilhelm prevailed against Shelby on his claim that Shelby breached the licensing agreement and breached the implied covenant of fair dealing concerning the agreement. Wilhelm also defeated Shelby ’s invasion of privacy claim. While the jury found Wilhelm infringed on Shelby trademarks, Wilhelm is determined to reexamine that issue on appeal. “We are pleased that the federal judge upheld the jury’s verdict that Shelby breached its licensing agreement with my company”, says Jon Wilhelm, President of Wilhelm Motor Works, “and we look forward to further challenges at the appellate level.” Wilhelm’s team of attorneys from the Quintana Law Group of Woodland Hills , CA consisted of Andres Quintana, John Houkum, and Daniel Taylor. “I couldn’t be more pleased with my attorneys”, said Wilhelm. “We faced and overcame several adversities during the course of this litigation. My team did a great job.”
About Wilhelm Motor Works
Wilhelm Motor Works was founded to restore and build premium classic cars, including several variations of the G.T. Mustangs, for an exclusive clientele. Expert in all aspects of fabrication, restoration, design and development, the Companys team founded and created the continuation Mustang program, capturing worldwide attention and awards at prestigious auto shows and races. The Wilhelm Motor Works team of craftspeople fulfills the dreams of discerning collectors and enthusiasts at its West Coast facility. Wilhelm is currently working on retractable hardtop Mustangs as his own design. Additional information about Wilhelm Motor Works, products, services, and memorabilia is available at www.WilhelmMotorWorks.com.
About the Quintana Law Group, APC
The Quintana Law Group is a versatile, civil litigation firm representing diverse clients in local and multi-jurisdictional litigation and other high-stakes disputes. The firm specializes in intellectual property matters. For more information, please refer to www.QLGLaw.com.
Shelby vs. Wilhelm: The Conclusion?
Restomod Magazine – May 2007, Issue 3, Pages 14 & 15 – The case of Shelby vs. Wilhelm is over and the verdict is in. I have to be honest with you, I really don’t understand it. But here is the way it’s been reported to me. As I wrote in the last edition of Restomod Magazine, when the court case was over, the jury found Shelby guilty on 3 of the 4 counts that defendant Jon Wilhelm (Wilhelm Motor Works) was either being sued for or was counter-suing; specifically, the jury found Shelby guilty of breach of contract, violation of the implied covenant of fair dealing and of unfairly withholding approval of the G.T.350C. I’m told it was the breach of contract by Shelby, which the jury found Shelby guilty of, that set in motion the events that led to the lawsuit. Here’s a little recap before we go over Shelby’s side of the case.
After breaching the contract, Jon says that Shelby told him his contract was totally cancelled. Jon says he refused to accept the cancellation of the contract, because the contract had a clause in it requiring both parties to notify the other of any breach of contract actions and to give the other party notice in writing and 60 days to correct the problem before the contract could legally be cancelled. Since Shelby did not follow this point of the contract, Jon says he continued to work to promote the G.T.350Cs, because he still had a deadline he had to meet which was set in writing by the contract. During this time, Jon and Wilhelm Motor Works continued to promote the G.T.350C while trying to negotiate a resolution to the problem with Shelby. Then, in December 2005, just a few days before Christmas, Shelby filed suit against Wilhelm Motor Works in federal court on several charges that resulted in this lawsuit. That brings us up to the start of the court proceedings.
On Shelby’s side, the jury found that Wilhelm Motor Works had violated the Shelby trademark on 6 counts: Wilhelm sold two t-shirts with the Shelby name and logo on each, and he tried to sell 2 cars on eBay, both of which were built here at Mustangs Plus. Shelby claimed the cars were shown and offered for sale without Shelby’s permission. According to the jury, all had infringed on Shelby’s trademark. As I wrote in the last issue, this all centered around the Route 66 Show in San Bernardino, California in September 2005. All the other charges that Shelby had filed against Wilhelm Motor Works were thrown out, dropped, or defeated during the court proceedings. When the dust settled, this is what the jury had to fix damages on for both sides.
That brings us to the second part of the lawsuit, which was the penalty phase. The penalty phase is where the jury awards damages to each side based on what they had found each party guilty of. I went back to Los Angeles and was called to the stand by Wilhelm Motor Works. I told how Jon had asked us if we would like to be involved in the building of the Prototype G.T.350C and possibly the production G.T.350Cs. I told how, to Jon’s specifications, we had built the Prototype and the other two G.T.350Cs that Jon had ordered from us while the contract with Shelby was valid. I also told of the other 20 plus Mustangs we had waiting back at Mustangs Plus to build into Shelby Continuation cars and of all the dollars we, as well as Jon Wilhelm, had spent on the project. In all, I was on the stand for about a 45 minutes. Shortly after my testimony, the case was handed back to the jury for their decision.
As soon as the case was handed back to the jury, I left to return to Stockton which is 360 miles north of Los Angeles. I understood that what was probably going to happen was that Shelby was going to get some sort of award from the jury and that Wilhelm was going to get some sort of award from the jury. Then, the lower award would be deducted from the higher award, and that would be how damages were settled. The balance of the awards would have to be paid by the one who was awarded the lesser damages.
As I’ve heard people say many times, “you never know what a jury will do” and that truly was the case here. After all the dust had settled, the evidence presented, the finger pointing over, the jury awarded Shelby $250,000 in damages and Wilhelm $250,000 in damages: The exact same amount for each. Somehow, this jury found that the breach of contract by Shelby was worth the exact same amount as Jon Wilhelm using the Shelby trademark to sell $25 of merchandise, even though he was a licensee of Shelby with a contract when he sold the merchandise in question. As I said at the beginning of this column, to be honest with you, I really don’t understand it.
But the jury wasn’t done yet. They also found that each party should pay the other’s attorney's fees. Jon tells me that since Shelby’s attorney's fees were substantially higher than his attorney’s fees, Wilhelm Motor Works will probably end up with a six figure bill to pay on top of losing all the money spent on the contract. So, as the saga of the Shelby G.T.350C ends, there will not be such a car in the Shelby Registry, and the three G.T.350Cs that we built here at Mustangs Plus, while Jon had his contract with Shelby, will remain in the Bramlett stable, their future unknown. As for my feelings on the whole messy matter, I’m sad that two companies that I have a great deal of respect and fondness for couldn’t work together to do something that would be positive for the Mustang hobby. We all, as Mustang, Shelby and automobile enthusiast, lose a little something in our hobby.
SHELBY COUNTER SUED FOR $250+ MILLION BY WILHELM MOTOR WORKS
Legendary Automaker Receives Massive Counter Suit in Trademark Infringement Case
WOODLAND HILLS, CA – September 1, 2006 – Carroll Shelby International, Inc. received a setback in its trademark infringement case against Jon Wilhelm and Wilhelm Motor Works since a federal court judge has allowed a 250+ million dollar counter suit to proceed against Carroll Shelby Licensing and the Carroll Hall Shelby Trust. The case hinges on whether Wilhelm and his company infringed on trademark laws in the fall of last year and whether or not Shelby acted fairly in its attempts to withdraw the licensing rights given to Wilhelm.
In June of 2005, Wilhelm received, as a settlement to a prior lawsuit, a lucrative license from Shelby to make an unlimited number of Continuation Shelby Mustangs – modified and restored classic Ford Mustang vehicles from 1964 to 1970 that are detailed to replicate, in appearance and operation, Shelby Mustangs from the same era. Wilhelm's license included the manufacturing and marketing of the Shelby G.T.350C, G.T.500C, G.T.350CR, and G.T.500CR vehicles on an "exclusive" basis. Other notable vehicles of this program include the G.T.500E "Eleanor" and the G.T.350SR.
Less than five months later, Shelby informed Wilhelm that his multi-million dollar license had been revoked. The purported reason: Wilhelm had distributed less than 100 marketing flyers that Shelby claims were unapproved and had shown the prototype vehicles before they were completed. "The claims in the Shelby case against me and subsequent press release that I was offering 'knock-offs' blatantly disregard the license I received from Shelby to produce these cars and related products. A public company should not be able to disregard the law and damage a small entrepreneur this way."
Wilhelm's federal counterclaim alleges, among other things, that Shelby breached the licensing agreement, interfered with Wilhelm's contractual and business relationships, and failed to support and promote Wilhelm as an official Shelby licensee.
Trial is set for January of 2007.
Jon Wilhelm of Wilhelm Motor Works and Andres Quintana of Quintana Law Group, APC, are confident that a jury will find that their claims have merit and that Wilhelm has been unjustly damaged by the actions of Shelby. For more information on either party, please refer to www.WilhelmMotorWorks.com or www.QLGLaw.com.