Reeves Callaway knows something about high horsepower.

In the 1980s, a derivative of his celebrated C4 Twin Turbo Corvette was known as the SledgeHammer, and it recorded a speed of 254 mph (406 km/h) on an Ohio test track, with 880 hp.

At the New York Auto Show in 1998, he rolled out the Callaway C12, based on the newly redesigned Corvette. The SuperNatural LS1 engine produces 440 hp (yes, that's based on SAE rating, not DIN) and propels the sleek super car to 60 mph (96 km/h) in less than 4.5 seconds.

So it was fitting to chat with Callaway at this year's New York Auto Show, moments after Bob Lutz revealed at a breakfast that General Motors Corp. would import the Holden Monaro coupe next year as a modern-day Pontiac GTO.

The breakfast plates hadn't even been scraped clean when the founder of Callaway Cars Inc., always looking for an opportunity, was breathless with excitement about the possibilities with the Monaro/GTO.

Callaway already supplies a 400-hp version of the LS1 5.7L OHV V-8 for the Holden Special Vehicles GTS in Australia. The car was an instant success in 2000, and Holden Special Vehicles doubled its order for Callaway engines in 2001.

The Monaro and GTS share the same platform, so Callaway's engine could work in the GTO. If Callaway has his way, the new GTO will offer as an option a high-output version of the standard LS1, which makes a none-too-shabby 350 hp as the base engine in Corvette.

The Callaway aftertreatment is good for an extra 50 hp. “And it's done very cost-effectively,” he says. “There's no additional hardware bolted on to the motor.” He says the power goals were achieved by working strictly on the upper end of the engine and with no displacement boost.

Callaway receives the GM LS1 at its shop in Old Lyme, CT. It then rebuilds the top end by machining the exhaust and intake ports and installing a new valvetrain, camshaft and throttle body. The engine also gets a new electronic control module and fuel delivery system. The powerplant remains normally aspirated, as turbocharging is an expensive alternative.

From Connecticut, Callaway ships the re-tuned LS1 engines direct to Australia for installation on the vehicle assembly line. If GM were to agree to offer the Callaway V-8 on the Pontiac GTO, the engine would travel more than 20,000 miles (32,000 km) from the U.S. to Australia and back before a driver even had a chance to mash the accelerator.

Callaway says he isn't assuming GM will offer the juiced-up V-8 in the GTO, but discussions have begun with the world's largest auto maker. And if GM wants the high-output engine for GTO, what's the limit of Callaway's capacity in Connecticut? “Good question,” the owner chuckles. “I've been asking the engine shop, what's the upper end?”

If GM asked for 10,000 engines, Callaway says his company could oblige. “We'd do it today.” For the high-performance Callaway Range Rover in 1999, the company provided the engineering and supplied parts to the Rover production line in the U.K. Such an arrangement could work with the Pontiac GTO, he suggests.

A Pontiac GMC spokesman says GM isn't closing the door on an enhanced GTO in later years. But he says the LS1 engine already is a high performer — as the base engine in the Corvette — even before Callaway tweaks it for another 50 hp.

The GTO proposal is part of Callaway's attempt to win more engineering business with OEMs. The company landed a contract to be a powertrain development partner to Mazda North American Operations for the new MazdaSpeed Protege, a 170-hp turbocharged prototype unveiled at this year's New York show.