Wheelers Dealers

DEPARTURES

American Express Platinum Card

Nov / Dec 1994

Wheelers Dealers

David Dourne learns the ins and outs of the antique-car market from its two biggest players.

In purple sweater, casual slacks, and athletic shoes, Don Williams swivels like a golfer behind his huge mahogany desk. When’s he’s not selling megabuck classic cars, he’s teeing off with the movers and shakers of the world. His body language tells me he’d rather be ion the links. As usual Williams has been fielding calls from Tokyo, London and Paris since the wee hours of the morning. His tanned face looks somewhat haggard as he runs his fingers through his blond hair while talking a mile a minute.

“I’ve sold a Bugatti Royale, I’ve sold a Ferrari GTO, a Mercedes Special Roadster, and the greatest Hispano-Suizas and Isotta Frachinis in the world,” he boasts in a single, baritone breath.

Like the womanizing Don Giovanni of opera fame, the 49-year-old wheeler-dealer’s catalogue of automotive conquests- the ultimate male toys-runs into the thousands. Most of his sales are secret. “A lot of the kind of deals I do I don’t want anybody to know about,” he growls, obviously regretting having invited me to the Blackhawk Collection, his sumptuous, soundproof headquarters-cum-showroom in Danville, California, 30 miles east of San Francisco.

The showroom’s polished black granite floors and mirrored ceilings reflect to infinity a gleaming red 1936 Mercedes 540K Cabriolet A priced at $850,000. Flanking it is a 1932 Rolls-Royce Phantom II Figoni & Falaschi Pillarless Berline, which once belonged to the prince of Nepal and is now worth $750,000. In all about $5 million worth of six-figure Bugattis, Bentleys, and Rolls-Royces sparkle like diamonds. “I basically put ‘em on pedestals like you would jewelry,” Williams says proudly. A warehouse hidden in the dry, oak-studded hills nearby holds another $10 million or so of William’s rare gems.

Judging by the opulence you’d never think the bottom fell out of the classic-car market in 1990. Obviously Blackhawk escaped the recession; the million-dollar showroom opened in ’92. Williams, who started out as teenage salesman at Old Time Cars in Los Angeles, has spent three decades buying and selling cars, and playing golf with potential buyers. In fact, that’s all he does. Divorced, with a grown son who helps around the shop, he arrives at 4:30 every morning and works the phones and fax all day, often napping in his plush office.

The telephone rings again, as it has throughout our conversation. He scoops it up and talks in cryptic language about a colleague in Paris-and a deal he doesn’t want me to know about.

Cut to a garage full of Aston Martins, Bugattis, and Ferraris in Paris’ 16^th arrondissement. In his dark, cluttered office Edgar Bensoussan puffs on his pipe and speaks in similarly coded language. But unlike his American friend and counterpart, this 75-year-old grandfather is the picture of serenity and sartorial elegance in his fawn-colored double-breasted jacket.

Despite dapper looks and a silky smile Bensouussan is a scrapper with motor oil in his blood. He tells me he adores the “rigor” of boxing, flew bombers for the Royal Air Force in World War II, and still does barrel rolls over Paris in his 1947 stunt bi-plane. His nickname - E.B. - stands his and another automaker Ettore Bugatti’s initials. Nothing could be more appropriate: E.B. used to ride to high school in his native Algeria, then a French colony, in his brother’s old Bugatti racing car. It was eventually scraped for the equivalent of $2.75, but not before Edgar had been bitten by the Bugatti bug. (He now represents the revived Italian firm in France.) He has watched the classic-car market evolve from prewar junkyards to its current level of respectability-on par with fine art.

“I visit the garages the way other people go to museums,” he says, his eyes gleaming. “A car made by the best chassis-makers, engineers, coach-builders, and leather-workers is unquestionably a work of art.” New York’s Museum of Modern Art apparently agrees with him: A 1990 Ferrari Formula 1 became part of their permanent contemporary design collection in 1993.

From a dusty shelf Bensoussan plucks a scale model of the 1854 Mercedes W196, in which Juan Manuel Fangio won the Swiss and German Grand Prix. “The most expensive car ever sold,” Bensoussan chortles. “Twenty million dollars and I was the intermediary.” The owner’s name? “Confidential,” he sniffs, suddenly sounding like a Swiss banker.

Secrecy is the wall I crash into time and again when talking to Bensoussan, Williams, and the other big wheels of the six- and seven-figure collectible-car market. Clients don’t want to be named-perhaps for fear of becoming targets (of kidnappers, thieves, the IRS?) of from embarrassment at what might be seen as conspicuous consumption. A car is a car, after all, and no car is worth $20 million, right?

Wrong. Insiders call automotive masterpieces “great cars.” What makes them great? A unique, peerlessly crafted custom body; original parts: the same chassis, body, and engine that they were built with; striking beauty; and to a lesser degree drive-ability and performance. To collectors like fashion mogul Ralph Lauren, Texas millionaire Jerry J. Moore, firearms manufacturer William B. Ruger, English industrialist Sir Anthony Bamford, and Jordan’s King Hussein, such cars are objects of passion, worth paying millions for.

Bensoussan and Williams are ruthless when tracking down dream cars for the automotively obsessed, but they rarely venture into the wild for themselves, using closed lipped agents or friends instead. Bensoussan admits to having used men in the field to get valuable Hispano-Suizas out of Portugal when revolutions threatened in the ‘70’s, and there’s plenty of unsubstantiated tales of bribes, smuggling, and the use of false license plates and papers to get cars out of other tight places. Stealth is the name of the game because all the top dealers are pursuing the same trophies. Sometimes they share information; and sometimes they mix it with disinformation. Williams, who tells sells about 50 great cars a year, refuses to reveal the mechanics of his trade because he fears fellow dealers will swoop down on his personal clientele ‘like buzzards going after dead meat.” Even researching a great car he says, can be risky – though authenticating provenance and originality is essential, since fake classic cars abound – and he sometimes has to give himself a cover. “If I ask questions people know I’ve found one,” he says, “and that creates a chase.”

To avoid any hunting accidents the big wheels rely on temporary alliances among themselves. This clubby bunch follows the concours d’elegance from Pebble Beach to Paris’ Bagatelle and the auction circuit from Monterey to Scottsdale to London. The big deals are done around these occasions, and they are complex indeed, since many dealers are themselves collectors, auctioneers and event organizers themselves rolled into one.

Bensoussan – the grand old man of the business – shows annually at Bagatelle, organizes exclusive motoring events, and enters cars in vintage rallies. He’s the French representative for Aston Martin, and Bugatti, revived after 40 years of slumber. His silent partner, Michael Sedouyx, a scion of one of France’s richest families, has a personal car collection worth millions of dollars.

But Williams is the biggest wheel of all. His tentacles embrace the Blackhawk Collection and the World Classic Auction & Exposition Company, which holds major events in Monterey, Las Vegas, ad Newport Beach. Auctioneer Rick Cole is one of his many partners. Williams has a hand in America’s bellwether Barrett-Jackson Classic Car Auction in Scottsdale, Arizona, and in Kruse International’s 40-plus-per-year auctions – the world’s biggest in sheer volume. He also works closely with Richie Clyne, head of the Antique and Collectible Auto Collection at the Imperial Palace Hotel & Casino in Las Vegas.

Most impressive of all is Williams’ behind-soundproof-doors relationship with real estate developer Ken Behring – “my Bank of America” as Williams puts it. Behring, who owns the Seattle Seahawks, built the luxurious Blackhawk Plaza, a shopping and cultural complex, and its centerpiece, the $100 million Behring Auto Museum, which opened in 1988.

I wander through the museum thinking it an annex to Williams’ showroom. No wonder: Both have an inimitable jewelry-shop look – pin lighting and reflective granite floors. Furthermore, perhaps 90 percent of the hundred or so museum-owned cars on display at the Behring were bought by Williams, including breathtaking Duesenbergs, Bugattis, and a pack of Ferraris. As I later discover. He also lends his own cars for rotating exhibits, sits on the collections committee with ken Behring and museum director, Skip Marketti, and lends a hand in what Marketti calls the acquisition and de-accessioning process. You can’t help wondering whether the Behring Museum would part with any of its exhibits for the right price. But Marketti says, “No car that’s for sale is ever on exhibit: We don’t want to have any confusion with our not-for-profit status.” (The museum is affiliated with the University of California at Berkeley.)

The big wheels set trends and records worldwide by focusing attention on particular types of automobiles. – prewar European classics, say, or postwar sports cars. They show selected autos at the top concours d’elegance and honor specific marques (makes of car) at rallies, thereby increasing their desirability – and value. Setting a world record sometimes shows foresight, sometimes stupidity, says Williams, admitting he was the first to pass the seven-figure post back in 1984 in a Duesenberg that fetched $1.4 million. “But I sure in hell didn’t want to tell you that” at the time, he explains. “because I sure didn’t want to sell a Duesenberg at that level and then try and go out and buy another one!” Record prices are kept under wraps until they become useful, it seems. If you hear about them immediately, adds Williams, they may be phony, and the “hidden agenda” may be to “hype” or “prop up” a market for speculators.

Back in 1983, in a secret one-off deal (he still won’t reveal any names or figures); Williams brought an entire classic collection from a Greek shipping magnate who was liquidating it to pay off debts. “This man had quietly, over a period of years, brought every great car that I had ever dreamed of,” says Williams, his eyes gleaming at long last. “He had good advice, great taste, and a lot of money. He paid unbelievable world records at the time for whatever he bought.” Those records were kept quiet, however.

With Ken Behring and his checkbook in tow, Williams “walked into a garage that to e was Mecca!” In it sat 14 great cars each worth millions of dollars. Among them was the unique, silver-plated “Maharaja” Daimler (now owned by an anonymous Indian collector but still on display at the Behring when I visited), the famed Hispano-Suiza Tulipwood (recently sold by Williams), and a one-off Mercedes Special Roadster.

Not long after this coup a Bugatti Royale from Harrah’s collection in Reno made headlines when it fetched an estimated $6.3 million. “Then, suddenly all hell broke loose,” says Williams, still golfing from his swivel chair.

The Bugatti Royale sale focused media attention on automobiles’ investment potential: So began the collector-car boom of the ‘80s. The notion caught fire, creating a global market. To feed it, concours and events proliferated. The Mille Miglia and Tour de France Auto were revived, for example, and the long-established Monterey historic race shifted into high gear. Prices began to spiral upwards, for many cars doubling yearly. They skyrocketed after the October ‘87 Wall Street crash, when speculators dumped bonds and began searching for tangibles to invest in – art, antiques and, for the first time, automobiles.

Prices peaked in 1989-90, when, according to Williams, “nobody could make a mistake-you’d just buy a car and it was worth more tomorrow.” This was the biggest cash Grand Prix in history. At its peak Bensoussan was commissioned to purchase the record-breaking Mercedes W196-the only model ever sold (Though Bensoussan won’t name them, I was eventually able to identify the players.) With his English friend and sometime associate Adrian Hamilton – a world power in postwar racing and sports cars – Bensoussan set out across England in a helicopter sent by the car’s owner, industrialist Sir Anthony Bamford. “The guy gave us a formidable demonstration of flying prowess” intended to shake up potential buyers before negotiations, says Bensoussan. But the pilot didn’t know his passenger was an RAF veteran. Unshaken, Bensoussan clinched the $20 million deal for his client, Jack J. Setton, one of France’s most discerning collectors.

When I mention his colleague’s apparently unbeatable record, Williams bristles. “There’ve been two or three cars in the $20-$22 million range,” he snaps, such as a Ferrari GTO sold to a Japanese buyer for $21 million. He hints at even bigger, unreported deals but won’t elaborate.

In parallel with the art market , car prices slid downhill in the late 1990 and hit bottom in 1992, leaving some speculators and collectors high-and-dry. Six- and Seven-figure cars, especially Ferraris, lost up to 50 percent of their top value. But more collector cars shed only 15-25 percent, returning in 1993-94 to 1987-88 levels. And as the economy picks up speed this year, car prices are set to climb again. New records are being set too. A reliable source, speaking on condition of anonymity, tells me that in 1993 Don Williams was behind “the largest sale of collector cars ever-period-from one source: $ $50 million.”

Needless to say, Williams doesn’t mention it. Instead he tells me he is no longer interested in world records. “My goal was always the beauty,” he says. Like Bensoussan, Williams sees in automobiles the ultimate artform. He applies the 360-degree test”: He walks slowly around each car as if it were the Michelangelo Pieta. Getting “chills of excitement” whenever one passes the test. Singling out the 1932 Rolls-Royce Phantom II, which was custom-fitted for Countess Dorothy de Frasso, he tells me how he pursued it for years, finally acquiring it then turned around and sold it. “I swore I would never sell that one, and I did,” confesses the hard core dealer.

Back in Paris, I hear more or less the same thing from Edgar Bensoussan: “I’m not faithful to cars,” he confesses. “Tomorrow it will be a new love. We’re forced to be like that in this business-otherwise you wouldn’t be a collectible-car dealer.”

There beauty provides Williams “chills of excitement,” Bensoussan thrill’s come from speed and power. His latest heartthrob is the brand-new Bugatti EB110 ($359,000 for the GT version, $424.000 for the Supersport). “It’s the best available in the world today,” says Bensoussan, as he settles into his - a low-slung GT. But is the new Bugatti, a great car of today, a future classic? Bensoussan thinks so: Williams says only time will tell: He is strictly a vintage-car man. Both agree, however, that now is the time to snap up all the collectible cars you can afford. Prices, especially in the under-$100,000 range, are unbeatable, and the dust from the arriving bull market of 1995 is already on the horizon. But would you buy a used car from one of these guys? I sure would, if only I could.

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