DENVER, N.C.—Fifty-two years ago, Matt Agosta's father-in-law Lynn Steele took a hobby and made it part of his business at Steele Rubber Products Inc. And make no mistake, Lynn Steele was a car guy.
In fact in the 1950s he went looking for rubber components that were needed for his 1931 classic Cadillac as part of his own hobby.
Steele started his tool-and-die business a few years previous in metro Detroit, developing production dies for the automotive industry. But as he was making parts for that core business, he backed into what became his future business.
“By the early 1970s the sideline job of manufacturing rubber pieces had become bigger than his tool and die business,” said Agosta, now the president of the company.
Steele eventually moved his business to Denver.
Today Steele Rubber continues to manufacture parts by hand and develops new components by using only originals and detailed research.
Steele Rubber has a 600-page catalog that offers close to 11,000 unique classic car parts and components, many of them a range of rubber pieces from body parts and bumpers to weatherstripping and body and engine mounts. One of the few types of components that Steele Rubber doesn't manufacture today is parts for drive trains.
That being said, there are business decisions to be made about which parts Steele Rubber should make available. And Agosta admits that at times it can be an imperfect science.
“Yes you could say that it can be considered an educated guess,” Steele said. “This is a very limited market, so we have to guess how many cars of a certain make and model actually exist. We do quite a bit of research as to how many of a classic car may exist but it isn't an exact science.”
When the company makes decisions on which parts to offer and make, it looks at such factors as how popular a make and model was and what the production numbers actually were.
Another key factor is researching the number of automotive clubs that exist around the U.S. and even globally. Many of the company's customers come from such clubs that have a very loyal following for their favorite vehicle.
There is a process of Steele Rubber executives crunching numbers to determine what the potential return on investment could be from a profit stand-point, Agosta said. It was easier when the number of highly sought-after classic cars was higher.
But the trends evolve and one of the biggest challenges is keeping up with such trends as the increasing popularity and rebirth of muscle cars from Challengers to Barracudas.
Besides, these days it is more difficult to classify what is technically considered a “classic car.” Agosta admits that it is in the eye of the collector.
“You can't really define a classic car because there are cars out there that I never thought would be considered a collectible,” Agosta said. “We recently made parts for a 1970s Pinto because there is a car group up there in Michigan, and I never would have thought that a Pinto would have been considered a classic car. It's incredible.”
Agosta admits that there are parts the company makes that he would never expect to recoup costs from.
However, there are a number of rubber components that help to pay for and fund many of the other thousands of parts.
Collectors and resellers
About 60 percent of Steele Rubber's customers are individual collectors and the other 40 percent comprises resellers, restoration experts and glass shops. The company and its 55 employees also sell to private collectors and car groups.
Agosta considers his firm a cross between meeting the needs of the restoration and street rod industries.
Yet just because a classic car has become wildly popular doesn't make it an ideal candidate for component manufacturing, Agosta said.
“The thing you have to remember is that A-list parts of such cars as Mustangs, Corvettes, Chevelles and more have already been widely made and in many ways have become commoditized,” Agosta said. “You can't make money on those types of parts unless you manufacture them overseas.”
Steele Rubber also is one of the few companies that does everything from the design and tooling to the manufacturing and selling of these parts in-house in the U.S., Agosta said.
Like most industries, classic cars have taken a hit with the current recession but as a passionate hobby it has not seen a significant dropoff, which has allowed Steele Rubber to continue to thrive.
“Sure the market has been hit hard by the economy but as a hobby that is often one of the last things to go when it comes to disposable income,” Agosta said. “We feel like we are in a very fortunate position.”