By Christina Fuoco-Karasinski
Fred Wagenhals is driving the munitions industry
Fred Wagenhals’ AMMO Inc. corporate headquarters in the Airpark looks like a standard office, but inside is magical to any NASCAR fan.
Racers’ uniforms in specially built cases line the walls of one of his offices. Earnhardt, Gordon—they’re all represented in this massive room of collectibles.
Above the racing gear is photos of Wagenhals and his friends, who include Farrah Fawcett and Kid Rock.
“I’ve met a lot of great people,” he says “Muhammad Ali was a great guy. I put him on a helicopter in Detroit to take him to the Detroit race. He was scared to death. He was standing there holding my hand. He had never been on a helicopter.”
Wagenhals wouldn’t have had these experiences if it wasn’t for his acute business sense. He founded Action Performance Companies, a licensed maker of tchotchkes for NASCAR and other motor sports organizations, as well as his latest project, AMMO Inc., a munitions company.
“Anything you saw with Earnhardt’s name on it or Jeff Gordon’s name on it, I made it,” he says nonchalantly about Action Performance Companies.
AMMO promotes branded munitions, including its patented STREAK, Visual Ammunition, /stelTH/ subsonic munitions, O.W.L. Technologies, and Night OPS (One Precise Shot)—a lead-free frangible tactical line of munitions for self-defense. Reality TV personality Jesse James has branded hollow-point bullets sold through AMMO.
Coming to Arizona
Wagenhals grew up in Mansfield, Ohio, about 40 miles from Columbus, and 70 miles from Cleveland.
Like most folks, Wagenhals couldn’t stand the Midwest snow any longer and relocated to Arizona.
“I had the cabdriver take me to Lincoln and Scottsdale roads,” he says. “There was a hotel. I stayed there and got up one morning and everybody was happy. Everybody was smiling. Everybody was polite. I figured out it must be the weather. I moved here in ’77.”
He enjoys the Western lifestyle and the cowboys.
“I never looked back and never wanted to go back,” he says.
In 1992, Wagenhals founded Action Performance Companies, a simple ideal that grew into a multimillion-dollar business.
“I saw an article in the Wall Street Journal that said baseball cards is a $500 million business,” Wagenhals says. “I said, ‘You know, why don’t I take a little die-cast car and put it with a trading card and come out with it?’”
At the time, the movie “Days of Thunder” was about to be released. Wagenhals traveled to China and met with the producers to see if he could have exclusive rights to manufacture its die-cast promotional cars. They turned him down because Matchbox had the rights. He asked about the premium promotions and those were handled already.
He turned his focus to Exxon, another partner. It agreed to offer Wagenhals’ cars for 99 cents when drivers filled up at Exxon gas stations.
“I went to the factory in China and they told me to put up the money because they weren’t going to build these little cars unless they had a letter of credit,” he recalls.
“I went to Exxon and said, ‘You need to give me a letter of credit so I can give the Chinese a letter of credit.’ I didn’t know anything about letters of credit. They said, ‘We give letters of credit to countries, not people.’”
The only remaining options were for Exxon—or Wagenhals—to write a $3.5 million check.
“So Exxon writes me this check,” he recalls. “I thought, ‘Holy Christ. What if I don’t deliver?’”
He was honestly more confident than that—until tragedy struck. An infamous oil tanker dubbed the Exxon Valdez spilled oil into Prince William Sound, Alaska, on March 24, 1989.
“They called me up and said, ‘Cancel the program,’” he says. “I said, ‘What do you mean ‘Cancel the program? You already paid me.’ They said the Valdez just happened and they didn’t want publicity. They said to just ship all the cars to every one of the stations and let them do whatever they want with them.”
Collectors bought entire racks of cars and, subsequently, the cars went for $9 on the resale market.
Wagenhals teamed up with Earnhardt to sell his merchandise, and then “locked everybody up exclusively.
“I owned all the rights. NASCAR woke up one day and they were (mad). They said, ‘You own our drivers.’ I owned their rights because they were all independent contractors.”
He even persuaded Earnhardt to change the color of his car and T-shirts for one race.
“He said, ‘Are you nuts? Get out of here.’ He almost threw me out of this motor coach,” he says with a laugh. “I said it was the 25th anniversary of R.J. Reynolds sponsoring NASCAR. We’ll do a silver car for one race.
“Nobody will know about it. We’ll announce it the week before the race and I’ll have a trailer’s full of merchandise.’ He didn’t want to do it, but I guaranteed him $1 million for one race and he said, ‘Let’s do it.’”
Wagenhals sold $22 million in merchandise that day, and paid Earnhardt $3.5 million for one race.
“Earnhardt said, ‘What are we doing next year?’”
Thank you, next
Wagenhals sold Action Performance Companies in December 2005 for $245 million.
In 2016, he moved into a different field—ammunition. AMMO Inc. was acquired to change, innovate and invigorate the complacent munitions industry. The company designs and manufactures products for a variety of markets, including law enforcement, military, hunting, sport shooting and self-defense.
The Airpark-based company has manufacturing operations in Northern Arizona and Manitowoc, Wisconsin.
STREAK allows the shooter to see the projectile’s path toward its target and the rounds are nonincendiary. They do not generate heat so they are safe to use in environments where tracers are prohibited and can be a serious fire hazard.
“The military was interested in that,” he says. “The police force was interested in that. I bought that patent.
“We just came out with another patent which was an armor-piercing bullet for the military use only and NATO countries that are friendly to us. It’ll go through an inch and a half of steel.”
“I saw a niche market and I’m always the guy who thinks, ‘How can I take something and build it into something bigger?’
“I saw an opportunity here and I said, ‘OK, I’m going to take this company public because I’d done it before. I’d been public. I went to all my NASCAR buddies. I made them a lot of money. I raised $5 million and said, ‘OK, let’s build this company together.’”
He has big plans yet for AMMO, which includes retired racer Rusty Wallace on its board of directors.
“We’ll do $40 million this year and I think we’ll do close to $100 million next year. We’re on a growth pattern and I’m comfortable with the direction we’re going.
“I think we can build this company up to a couple hundred million in the next few years and I think somebody will come along and, just like NASCAR did, say, ‘We’re smarter than you. You need to leave.’”
AMMO is bound to be successful, Wagenhals says, because of the prevalence of guns.
“Here’s a company I can build in an industry that is going to be here for a long time,” he says.
“They’re never going to take away 300 million guns—registered guns. There’s probably another 300 that aren’t registered. I like the hunting industry. I like the shooting industry. I believe in the second amendment. I believe in helping build a better product for our military people and our law enforcement people.”
At 79, Wagenhals says retirement isn’t in his sight, but when it is, he’ll leave his company to his grandchildren.
“I like working,” he admits. “I come to work every morning—if I’m in town—at 5, 5:30. My assistant, who’s been with me for 42 years has an iced tea and a Dunkin’ Donut ready for me every morning. I care about people. I never built my companies by myself.
“I got all the credit because I got to be the guy at the top. What made me proudest of anything is 21 of my people became millionaires when they left. I’m not going to do AMMO alone. There are people helping me with that and they’re all going to be rewarded. I’m a firm believer in everybody needs to go home with a paycheck, but if we get it to a particular level, everybody wins.”
Info: ammonic.com ν