Eric Latino loves speed.
This past May, the president and CEO of Global Emissions Systems Inc., set a Canadian record in pro-modified racing: a 5.871-second quarter-mile at 245 miles an hour in his 1969 Chevy Camaro. The 47-year-old entrepreneur is also a master mechanic, co-founder of the emission control technology GESi – a type of catalytic converter that can be used on almost any combustible engine – and his Whitby, Ont.-based company's chief technology officer.
Throughout his career, Mr. Latino has battled exhaust emissions of every kind, from gas-burning lawn mowers to power-generation plants. Although he quit racing 15 years ago to focus on business, he's back with a cause that combines his love of drag racing with his company. He's passionate about taking his carbon reducing technology into motor sports and figures the best way is to lead his own Team Green for some R&D at the track.
We caught up with Mr. Latino between races to talk about his success story.
Q: You founded your first company, Redline Automotive Inc., to service classic autos and on-track race cars when you were barely out of high school. How did you start?
A: I had just turned 20 when I started Redline in 1985. I used to work for a great guy called George over at Broadview and Danforth (in Toronto's east end) who specialized in Corvettes and classic cars. He was a great teacher. I grew up in the neighbourhood so when I was 12 and 13, I'd hang out there and watch. Later, I'd skip high school because I wanted to go to work so badly. I did pretty well in school anyway – I finished and became a licensed mechanic. George would go off on trips leaving me in charge so I learned to answer the phone, order parts and deal with the customers. After my parents moved to Markham (Ontario), it was a long drive. Around that same time, George didn't want to do much classic car work any more, so I opened my first location at Markham Road and Steeles in (Toronto suburb) Scarborough, which was central to Markham and George's existing customers.
It was a four-bay shop that I worked by myself – seven days a week to get things going. I didn't have an office – my desk was in one corner of the workshop – and I didn't know much about business. I just knew how to fix cars. I didn't know how to properly charge for the work so I made barely enough to keep the lights on. It took me three years before I increased my service fees. I was too young – busy having fun and making friends with the people who brought their cars in.
Q: Where did it go from there?
A: I rapidly grew the business from that one location. Within two years, we had expanded to a seven-bay shop, hired new mechanics and in three years, outgrew that place. I had an opportunity to take over a Bridgestone/Firestone tire and auto-shop franchise in 1993. I used to purchase my tires there and knew the owner well. Originally, I didn't want to be part of a franchise, but Firestone offered us great support.
Q: How did you raise the money for that?
A: The owner liked me and was ready to retire so he sold it to me really cheaply. He took back a 50-per-cent finance and I went to Scotiabank and got a small-business loan. I paid it off in less than two years. Buying it was the best thing I ever did.
Q: What was the biggest challenge?
A: It was tough times in 1993, but when I put the two businesses together, it worked out well. I brought Redline into that location so it doubled the business and took away 30 per cent of the expenses (heat, hydro, rent). We kept all the staff.
Q: How did you get into racing?
A: My older brother took me to the drag strip when I was 14 and I got the hook. I grew up in the '70s in a neighbourhood where everybody had a muscle car. When I was 16, I drove myself to the race track with my first car, a 1969 Pontiac Acadian SS, put the racing tires on and went down the drag strip at 14 seconds. That was a pretty decent car for the time. I changed the engine and went 12 seconds. I changed the whole car and it ran in the low 10s, then down to nines.
Q: Why did you stop racing?
A: When I got the Firestone franchise, I completely stripped that car – took the engine and transmission out and sold everything – because I knew that I couldn't focus on racing and grow a new business at the same time. But I still own that car today. I always kept it.
For 15 years, I completely stopped racing myself and focused on growing the business. I'd build race cars for customers and assist them at the race track to maintain the car.
Q: How did you become interested in developing new emission control technology?
A: People would buy a brand new Corvette, come in and ask us to modify the car. We'd leave the emission controls on the cars but we'd increase the horsepower so much that the exhaust temperatures got so hot they would liquify and disintegrate the internal components. So half the cars didn't have the emission controls on them but you didn't know they were out until you went for an emissions test.
When Ontario's Drive Clean program came out in 1999, we were up against a tough task to get the cars to pass an emissions test and it was impossible to buy a universal catalytic converter off the shelf. People were threatening to sue me because now they couldn't drive their cars or sell them because their cars had no emissions control. 'You made our car real nice but you also wrecked it for us.'
Q: How did you handle that?
A: Necessity is the mother of all invention. One of my customers was a chemical engineer named Ron Krentz who travelled all over the world treating industrial stacks – sulphuric acid plants with really high temperatures that needed systems to reduce the noxious emissions. I told him what I was up against and we formed a group with other chemical and thermal engineers he knew. Ron is a co-founder of Global Emissions, our chief science officer and a member of the board. He'd give us ideas and we'd work with them and take the pieces to a local fabrication shop that did race cars to build them. We'd test them until we got one that didn't melt down and kept the emissions in compliance. It took us about three months.
We couldn't afford to mass produce the product. I wasn't thinking about that at that point – I just wanted to get all these cars on the road. But then we figured that we weren't the only ones having to face these strict emissions regulations so we advertised in some of the car performance magazines, got a website going and started selling them. We adapted our emissions technology for major clients in Australia and in the United States.
Q: What kind of learning curve was that for you?
A: You need a team to conquer any business. I did a lot of sports in my life growing up and it wasn't just the quarterback or the receiver, but the whole team who made the win. So I surrounded myself with successful, smart engineers like Ron. I'm not the only brain behind this. It's the whole team that made the company. We filed for patents in 2001, so we have patented designs and technology.
Q: How did you finance the development of your technology?
A: I'm lucky I had an existing business, Redline Automotive, that actually made money. Redline kept the lights on. We used the same facilities and Redline already had the tools that I needed to develop and test the actual product. All the development for Global Emissions from 2001 to 2006 was done under the roof of Redline.
Q: What changed in 2006?
A: We were still a cottage industry that year when Al Gore went around the world on his Inconvenient Truth tour telling everybody that greenhouse gases are here and we have to deal with climate change and reduce industrial emissions. Our phone rang off the wall. I found myself spending more time on the emission controls than I was on my performance industry. As much as I really loved what I was doing, I felt there was a bigger opportunity and more of a demand for green technology.
We did bring in some investors. By then, we realized that we had a really big deal – a company that could do well in the space. We'd test our products against competitors' products and have a greater reduction of emissions. So in 2007, we bought our facilities in Whitby and I started doing the emission controls full time.
Q: How do you define your role in the company?
A: I've been a blue collar worker, never a white collar worker, and I'd never been involved with the corporate world before. By 2008, I realized that I needed somebody who could help me grow this company. I had a long-time Redline customer, Gary Jarosz, who had worked with IBM and Xerox, and I felt he was the right guy to help me scale this company. He's vice-president now and does a lot of the administration work
I'm president and CEO, but I'm more a chief technology officer doing a lot of research and development and the on-road testing. We're kind of wearing three or four different hats right now.
Q: What was the biggest push for the company?
A: Legislation. There was nothing pushing people to use emission controls until legislation forced them to do it. As much as they all said 'wow, great technology, great idea, we gotta do it,' they had no budget for it.
Q: Why did you go back to racing?
A: We felt that you couldn't go to a race team and convince them that you have to push the green thing in motor sports without doing it ourselves. This past season, we built a brand new race car that runs on ethanol, painted it black on the bottom and green on the top with a barbed wire twisted through the two colours. The whole sell is that the black is where the environment was going to, the barbed wire is the safety barrier and the green is where we're trying to bring the environment to.
When I decided to get back into racing, I went out and found the right partners and crew. I partnered with Bruce Mehlenbacher, director of operations for the PMRA (Pro Modified Race Association) series. Basically what we're doing is educating racers about making greener choices. We've done seminars with about 250 racers on following environmental practices at the track. For example, how to capture and recycle the leftover oil left in emptied containers that's normally wasted
We're bringing our emissions technology into racing as well. On our co-race team, we have GESi technology devices on our generators, tow vehicles and we're now coding the internal components of the exhaust pipes with our technology to reduce the emissions coming out of the race car. We have orders from other racers who want to retrofit their existing equipment to reduce emissions coming out of their gas-burning engines.
Rob Sporing and I teamed up to build the new car with everything state of the art. Financially, for me to do this alone, I'd have to invest about $1 million dollars for trailers, trucks, motors and all. We didn't cut corners with the body or engine but when we came up to our first race, we struggled. With a brand new car on the racetrack, you have to make adjustments to the suspension and engine. So we didn't qualify in our first race, which put us about 50 points behind in that series.
We qualified at No. 2 for our second race at the Cayuga Dragway, ended up winning and setting a Canadian record there.
Q: How did that feel?
A: Unbelievable. I couldn't even put my helmet on, my head was so big.
Then we backed it up. It's one thing to go that fast, it's another thing to do it again. That whole weekend, we just kept hitting those same numbers back to back. In our third race, we qualified No. 2 again but the track temperature was over 130 degrees. Because we had no experience to run at that track temperature with this vehicle, as soon as I let out my clutch to get the car moving, it just spun the wheels and I got eliminated in the first round.
After that, our crew decided we needed to test in between the races in the same hot and nasty conditions that we're going to be racing in the rest of the summer. So in July, we went to some invitational drag races, like the one in Grand Bend (Ontario). We had the same hot conditions as before, again spun the tires and came back after some suspension changes. By the time we got to the third qualifier, we qualified No. 1. We came second in the final but we learned so much in that week.
Q: What effect has going back into racing had on the company?
A: I think it shows leadership that we've come up with a brand new car and team following environmental green practices. It's a bit of work to be environmentally conscious and still focused on winning, but we've done it.
The thing about racing is this: It keeps the mind going and it's taught us to overcome challenges. We're always building something and testing it. We're seeing what went wrong, what went right and we record everything. Then we take that data and keep making our changes.
Racing is absolutely part of our research and development. There isn't a race car in the world that has emission controls technology on race cars. For our last race of the year in September, we'll have emission control technology installed on that engine because we're so sure it won't affect the performance.
Racing has also created public awareness for us. It has let people know that we're reducing emissions from a race car and actually winning races. Go green, go fast.
Q: What's the biggest challenge in juggling all these different roles?
A: At one time, I used to think I had to do it all myself. Most entrepreneurs think that there's nobody else as good as them but I learned about eight years ago that wasn't true. You've got to surround yourself with the right people. When I'm out racing, I'm not concerned about what's going on at Global Emissions because I know that Gary has everything under control and my brother Charlie and my wife Sue runs Redline like a well-oiled machine.
Q: What's your advice to other entrepreneurs?
A: Focus and consistency. What I mean by consistency is that in everything you do, you have to follow up the same processes over and over again. You don't start developing something using very stringent policies, and then once you start manufacturing and get the company going, allow standards to fall off.
If you're coming out with innovative technology today, if you want to market it, you have to keep developing that technology and know what you're going to need to have six months or a year down the road.
Look at BlackBerry. RIM's a great company – they grew it very strong and I wish them well – but they just didn't keep up and listen to the customers who wanted different technologies. So they fell back. I think they can fix it but they lost the focus on the actual consumers buying the product. You can't do that.
Special to The Globe and Mail
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