Empire of the Don - Tycoon with a Tight Soul

Marty Padgett, Autoweek, December 1996

Out in Georgia, about an hour’s ride from the theater on Peachtree Street where Gone with the Wind first flickered to life, there is a modern-day Tara that Margaret Mitchell might have seen only in a reverie. Covering 3300 green acres, Chateau Elan is an 18th-century French-style confection that cost $120 million to build, and employs 600 people. It offers several fine restaurants, spa treatments ($459 for a basic day-package of massages. $2,299 for a six-day journey into salt glows and Vichy showers) and three golf courses, as well as an award-winning winery. Seen from Interstate 85, as it perches imperiously on the rumpled green carpet north of Atlanta, it is as imposing in magnitude as it is incongruous in its rural Georgia setting.

In other words, perfect. Because if a man’s home needs to be not only his castle but a statement of his purpose in life, Chateau Elan announces the grandiose, ambitious, internationalist complexity of its owner. Don Panoz.

Unknown even to the serious wine connoisseur just five years ago, Panoz today is the proprietor not of just a label but a portfolio of labels. Anonymous in the world of racing even as the ‘80s turned into the last decade of the century. Today Don Panoz is a heavyweight constructor, team owner and entrant in international sports car competition.

Most astonishingly, he was not even a blip on the radar screen of the most alert and voracious of racing entrepreneur predators. Bernie Ecelestone, as late as two years ago. Today Don Panoz as the owner of Road Atlanta is a rich target for the Fl interests who want to return to the United States.

All these things and more.

He is a pharmaceutical multimillionaire whose company presides over stunning devices and patents and yet he is unwilling to discuss them.

He is a self-made entrepreneur who rose from the humblest of beginnings in Ohio to industrial prominence in Ireland; still, he will not speak of the life journey that took him there.

He is on the verge of becoming as high profile an international sports figure as it’s possible to become this side of Michael Schumacher. But if you ask him why he’s gone to all the trouble to fund, fight for and create an international sports car team to compete with the likes of Porsche, he falls back either into deliberate obfuscation or disingenuousness. Even something as inconsequential as his background in cars is cause for vagueness and stagy modesty. For example, Panoz says he’s owned everything from a ‘48 Mercury to Jaguars, BMWs and Mercedes. And in the same breath he claims "I didn’t even know how to open the hood on my Lexus." He’s the man and the money behind the radical Panoz GTR 1 which, in its first year of racing, finished second in SportsCar’s GT1 class 1997 manufacturers’ championship, beaten only by Porsche. Who is Don Panoz? Where did he come from?

He will not say. His trail is cold. Tracking Don Panoz is thankless, like looking for diamonds in a shale quarry. This we know: Panoz was an only child, born Donald Panunzio, in 1935, in Ohio. Soon after, the family moved to West Virginia where his mother had roots Irish roots, which, even at 62, are traceable in the reddish tint to his hair. His father was a professional boxer who immigrated to the United States from Abruzzi, Italy and shortened the family name to fit on the back of the robe he wore in the ring. Was Panoz pere a boxer because it was a way to earn money or because it was a path to glory’? Did the clan move to West Virginia because it needed the support of Panoz mere’s family or because she was lonely? Were Don Panoz’s growing up years the source of his enormous ambition, his determination to control his own economic destiny? What is the origin of the incredible need for privacy in his life, the almost-secrecy’? We simply don’t know. Panoz won’t say and records of inconsequential lower middle class families are not rich in the detail of their lives. We do know that when next we see Don Panoz, he is at of all places, military school, and later at the University of Pittsburgh.

But almost immediately after that things get interesting, if not much more enlightening. At age 19 he marries, enrolls in a course of business administration at Pitt and plays semi-pro football alongside a young Johnny Unitas. And then suddenly, in 1954 he quits college and joins the Army. Nothing strange there. It happened to lots of university students in the '50s; the military was a much better choice than academic failure for more than one. Nor was it such a surprise that Panoz was shipped to Japan, where we had a considerable establishment.

What is interesting though is what he did there, the first real indication we get of his capitalistic opportunism. Perhaps it was because he became a father in Japan—the first of his five children (Donna, Dena, Lisa, Danny and Andrea) was born there—and he needed the money, but Panoz took advantage of his time and place to broker the shipping of his buddies’ cars back to the States. He did so well at it that after two years he returned to Pittsburgh and bought a drugstore with money he had earned.

At first he enrolled in night school at Duquesne University, but clearly he had seen the entrepreneurial light. He quit school and bought a second drugstore. That grew into the business of packaging pills for prisons and orphanages, which expanded into the capsule-making business, in an old condemned roller rink back in West Virginia. He called the company Mylan Laboratories. "Those were very difficult years," recalls Nancy, his wife of 43 years. ‘"We had a young family. He worked 14 to 16 hours every day."

At this point, the mists begin really to close on the Panoz legend and things get genuinely interesting. By the late 1960s he had wanted to begin researching and developing new drug delivery systems, not just packaging and reselling existing ones. He sold his interest in Mylan for $60.000 and started over.

With relatively little capital and with start-up regulatory costs so high in the States, he needed a base in a country with minimal red tape. He and Nancy landed in Ireland in 1968, with five children between 14 and 4 years old, and not a soul to call.

Don Panoz’s ability to draw business to him must have had no trouble crossing the Atlantic because son Danny, who now builds the Panoz Roadster (see side-bar), remembers the whole family working in the factory to fill early pharmaceutical orders. Still, things were difficult. "You tend to look at it like, ‘He’s our dad, things are going to be fine,’ but it was a struggle a lot longer than it’s been a success."

"You wonder if you can pull it off," the elder Panoz says of the enterprise he called Elan Corp. "Some mornings I didn’t know whether to shave or cut my throat."

Some great businesses take generations to build, some fortunes take centuries. But in a short 15 years Don Panoz was back in the United States and a very wealthy man, thanks to his surrounding himself with researchers who developed better time-release capsules and more importantly, the transdermal patch, first used by cardiac patients to deliver nitroglycerin. The same idea has since been applied to nicotine, and Panoz holds a patent on the patch. Elan, which went public in 1985, had revenues of $5.7 billion last year. Published reports have pegged Panoz as a billionaire.

Danny Panoz returned to the States when he was 17. He knocked around dreaming of a career in aviation and actually owned a small charter service. He studied at Embry-Riddle Aeronautical University in Daytona Beach, but like his dad, quit school. He worked around Chateau Elan fixing and even fabricating machinery. Then, on a visit back to Ireland, he came across Pete and Sean Thompson who were building the TMC Costin, a car they hoped would become the Lotus 7 of Ireland. Opportunity waiting for an opportunist. The company was about to be liquidated, so Panoz bought it, moved the works to the States and began very limited production six years ago.

The car he built in Georgia was clever. A little primitive, and a little obvious, but clever in the sense that it antedated the Prowler by seven years. When this magazine drove it—and put it on our cover (AW, Sept. 21, 1992)—we were impressed. And we weren’t the only ones. Still, for all the good publicity, it has been a struggle. Until, that is, his father got involved three years ago.

Don Panoz initiated a series of meetings with Adrian Reynard that began in December 1995, to see if he could help improve the Panoz Roadster.

Everything that happened thereafter has the feeling of inevitability. Reynard saw the Esperante and told Panoz, "We can actually make a GT version of that thing and go racing."

Today, Don Panoz says, "My feeling was quite simply that it was a little bit of a challenge, to go head-to-head with the likes of the German and British racing empires."

These days, Reynard builds the GTR l’s carbon fiber monocoque chassis. "The challenge," Reynard says, "is quite intricate, and the more he gets into it the more interesting he finds it."

Less than three months after that initial discussion with Reynard, having had no thoughts or intentions of racing, let alone experience at it, Don Panoz formed Panoz Motor Sports with the goal of winning Le Mans overall. He already had a relationship with Roush Racing, which was building engines for the Esperante. That made the 5.9-liter Roush Ford pushrod engine a natural choice. Reynard built three racecars by June. At Le Mans, the leading Panoz was running in the top 10 after 17 hours, but a prop shaft failed, the result of the incorrect pitch on some new titanium bolts.

This has been a year during which Panoz has had to test his instincts in the racing world and has often seemed stunned by what he has found. "He has discovered that it’s a complex business, where you can ask fairly simple questions and get complicated answers," Reynard says diplomatically.

Don Panoz chooses the words to describe his dismay carefully:

"I think there have been a lot of strange rule changes that affect us more than anybody else."

Nobody ever said racing was fair. It’s a business for the organizer just as it’s a business for a carmaker. Of course there is one rule for one car and another rule for another car. And a small carmaker like Panoz gets in line behind a larger one like Porsche. "It’s a matter of leverage," says one onlooker. And so the question becomes, Is Don Panoz patient enough and willing enough to pay his dues? Reeves Callaway is, but hasn’t yet.

Andy Evans wasn’t and couldn’t. Two months ago, Panoz Motor Sports hired Tony Dow away from Tom Walkinshaw and the Arrows F1 team. Dow is tough, straight talking and clear-eyed. He has experience in the United States, having managed the TWR team when it so successfully raced its V12 Jaguars in IMSA, including one to victory at the Daytona 24 Hours. If there are any weak links at Panoz Motor Sports, Dow will find them. When he finds them, he will fix them or get rid of them or take a walk himself. Dow is just back from England where he was involved in planning the ‘98 season in the United States. Both the Panoz Motor Sports and the DAMS team will run the USRRC, plus Sebring. At Daytona, the drivers will be Doc Bundy, Andy Wallace, Eric Bernard and David Brabham, plus two more Americans the team has not chosen yet.

As for Europe, Reynard says, "Our goal is to shame the big factory teams by what we do on privateer budgets. They spend 10, 20 times more than Don, and have massive publicity machinery. But we’ve forced them to move the goal posts.

"The challenge to Don is whether to increase the game or not." And you know what they say about racing: The game is in the budget.

"My feeling was quite simply that it was a little bit of a challenge, to go head-to-head with the likes of the German and British racing empires."