Everyone had a feeling something had to give. And it has.A week removed from Chapter 11 bankruptcy filing, General Motors has pulled its factory support for teams in NASCAR's Nationwide and Camping World Truck series. And as the company evaluates its financial commitment to motorsports, there is concern that further cost-cutting may involve the Sprint Cup Series too. Several teams fielding Chevrolets in the Nationwide Series confirmed the news on Friday in statements.
"Obviously the automotive industry is dealing with unprecedented business challenges and we understand the need for restructuring to accommodate the need to reduce costs and maximize returns,'' said Kelley Earnhardt, general manager of JR Motorsports, a Nationwide team owned by her brother Dale Earnhardt Jr.
"The manufacturer support GM provides in the NASCAR Sprint Cup level is more critical in nature than in the Nationwide Series and I hope Chevy is able to continue supporting that level as the promotion of NASCAR works well for its demographics.''
Win on Sunday, sell on Monday is one of NASCAR's oldest refrains. Now it's a lifeline.
With the country's auto makers suffering major financial setbacks -- GM and Chrysler have already accepted government bailouts -- it's only natural to question whether the companies regard racing, and NASCAR specifically, as an essential expense.
Ironically, or maybe not, the marquee Sprint Cup Series is racing just outside Detroit this weekend as this major bit of news comes down. There will be a lot of focus, and serious talk, about the factory involvement as the companies are in the middle of shutting down plants, laying off thousands of workers and cinching their purse strings.
"Chevrolet's involvement in racing is a sound business decision that translates directly into the sale of cars and trucks,'' GM said in a statement to the Sports Business Journal.
"It is essential, however, that we continue to look at every penny we spend as General Motors takes the necessary steps to become a leaner company with a significantly stronger balance sheet.
"While Chevy Racing is talking to its business partners about ways to reduce cost and maximize the return on investment, it is our policy to not talk about the details of business relationships with our partners.''
Perhaps, but everyone else is talking. And worrying.
"Although this will require some internal restructuring, our commitment to our sponsors to provide the best possible product on the race track will not change,'' said Kevin Harvick, a Cup Series driver that fields and has won a championship with Chevy-backed teams in both the Nationwide and Truck series.
A large, high profile team such as Harvick's and JR Motorsports typically would receive manufacturer support in terms of engineering and engine development in addition to cash payments. It's unclear the immediate impact GM's cutbacks will have for these established teams.
Already in the Sprint Cup Series, there are rumors that teams are exploring other options. Richard Petty Motorsports is rumored to be interested in switching from Dodge to Toyota, for example.
"Chevrolet is going through some very challenging times,'' Dale Earnhardt Jr. said Friday at Michigan International Speedway. "I had a true understanding that this would be coming down the pipe and they would have to make some adjustments.
"Every company not only in this sport but particularly having a company of my own I've had to make adjustments due to how the economy has turned so it wouldn't be any different for anybody else. I've been a loyal supporter of Chevrolet for a very long time and will continue to be.''
Ford Motor Company has proven itself on more solid ground than its GM and Chrysler counterparts. It hasn't had to take government money and to date hasn't made any major changes in its financial dealings with its race teams.
Matt Kenseth, a Ford driver and the Cup Series' 2003 champion, joined several drivers at Ford's headquarters this week before on-track activity started at MIS. And while he said the tone of the meeting wasn't as upbeat as years past, he remains optimistic about Ford's involvement in NASCAR.
"It's always been strong and they've always said that the very last thing they would ever cut is the NASCAR funding because they realize how important it is to their brand and to their success in selling vehicles,'' Kenseth said Friday.
"I think they're seeing some signs of recovery, but certainly I don't think they're comfortable where they are because they're not at levels where they were a few years ago. Auto sales aren't at that level overall.
"Obviously it's a struggle for everybody, I don't know what's gonna happen with basically the government running two auto companies and another one running itself, so I don't know what that's gonna work out.
"But certainly, I'm proud to drive a Ford and I'm glad they haven't had to go down the avenue the other two have.''
Reader Comments (Page 1 of 1)
6-12-2009 @ 4:11PM
mingo said...
Looks like Obama and team don't like NASCAR They are calling the shots here
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6-12-2009 @ 6:16PM
demzrdopes said...
You ain't seen nothin' yet..
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6-12-2009 @ 6:41PM
illsell4u said...
I had actually expected this from Dodge first. I had thought they were in much worse shape than GM. Richard Petty did say earlier this week that Dodge is cutting back on them in the Sprint league. I would not be surprised to see GM and Dodge totally pull out of Nascar for a while.
Nascar may be on the brink of a HUGE change in the way we see the races we love to watch. I have no way of knowing what the car manufacturers provide to each team in the way of total dollars but expect all the teams with less than 4 drivers to start a mad scramble to merge in order to save costs. Many may simply have to fold and as a result we may not be seeing 43 car fields each and every week. Toyota and Ford are not going to even try to pick up all the teams and many do not want their help.
Many people are going to blame the government and it is hard to blame them. These companies took billions of tax payer dollars and still have had to declare bankruptcy. The government cannot help itself but to try to now manage where their, OUR, money has gone. How can you possibly measure the return on the money that is spent on the Nascar teams? If you cannot show it is productive, expect it to be cut.
One thing I am sure of, if the NBA depended on dollars from the car companies to survive the current administration would insist that the NBA be given TARP funds to succeed. One look at the demographics of Nascar teams, owners, fans, and most liklely voting block tells me Nascar is NOT going to get any simpathy from government on this one.
Yes, Susan, it is a political issue.
MBL
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6-12-2009 @ 6:55PM
SNATCH said...
nascar truck racing sucks its like watching golf on tv snooore
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6-12-2009 @ 7:54PM
keokiwc said...
GET JR OUT AND KYLE IN ....SAVE GM...JR HAS NO CLUE HOW TO SET A CAR UP...HOW LONG BEFORE SPRIT GOES TOO..GOOD OLE DIRT TRACKS HERE WE COME
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6-12-2009 @ 9:05PM
Kim said...
This is sad and scary as a fan of a driver who happens to drive a Chevrolet. I am dissapointed to read this. I would think that their motto, "Win on Sundays, sell on Mondays" would work for them. I mean, heck....if I had the money to go out and buy another new car, I would certainly look into purchasing a Chevy Impalla. I am impressed by how they run on the track, their look and other things. Before the Chevy teams ran Impallas, they ran Monte Carlos, which I owned one myself. I LOVED that car! I only got rid of it because it hit 180,000 miles and started, yes I said started to have problems that I didn't want to fix. Great car.
This is sad. I certainly hope it doesn't impact my favorite Hendrick Motor Sport's driver.
And as a taxpayer, I am PISSED! Our government TRIED to bail these car manufacturers out with OUR hard earned money. It didn't even last two months and they still had to file bankruptcy. Not only does that protect them from their other finacers, stock owners, but also from us, the American people who bailed them out in the first place! They need to get their crap together and quick!
Kim
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6-12-2009 @ 10:27PM
gregsachiko said...
I told everone that when those crappy car manufacturers were asking (YES PEOPLE!!Ford took the first handout in Sept of 2008) Those other two (GM and Chrysler)came back for seconds, I knew they were going to file bankruptcy soon after. They needed the second bailout BEFORE Christmas!!!! We were laughing in Nagoya when we first heard of this because we were NOT stupid and knew the big shots were stock piling their banks with "Bonuses" because remember there are so many loopholes in the system just to allow them to do it! Obama will NOT let his people (Unions) to go down in flames if he cannot help it.
This is my profession and I know way too much that goes on in the management sector in the automotive world.
China is coming on strong with their BYI CAR.
Here you go haftwit, GM AND CHINA are in business together you commie loving little man LOL.
Saturn and I am praying that Honda will come to Nascar.
Greg- san
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6-12-2009 @ 11:08PM
guizzotti said...
When I was young I hated ford, but if I do buy an american car it will be a ford. This isn't the first time the company resisted government influence. Check FDR and NRA act. I respect Ford now and I hope everyone will buy them when they choose a new car.
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6-12-2009 @ 11:31PM
gregsachiko said...
Guizzotti,
Let's just hope Ford pays back the FIRST installation of that bailout....
Mazda engineers/designers are the majority responsible for those new Ford cars, the only cars they will not touch is the Mustang and the F series trucks.
Greg-san
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6-12-2009 @ 11:33PM
gregsachiko said...
Ford is ALSO selling Volvo to .......sigh........
CHINA.
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6-13-2009 @ 1:25AM
killerthud said...
Speaking of pulling sponsors, Steve Walaces US Fidalis' car needs to have that sponsor pulled. If You read the article on AOL about car warranty scams, US Fidalis is being investigated by the attorney general and the Better Buisness Beuraeu for scamming millions of people including elderly people that don't own or drive cars anymore out of millions of dollars along with other companies by not honoring thier extended warranties, and thinking of any excuse to not pay for repairs, and according to the article if you read the warranty, there is barely anything covered to begin with. That is why I think the sponsor needs to be pulled off the car and the commercials that are aired during Nascar races on TV.
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6-13-2009 @ 2:02AM
GM Import said...
Like I've been writing. GM said when they file for bankruptcy their plan is to close more American plants and lay off the workers. At the same time they will build new plants using tax payer stimulus money and hire workers in China for the new "green" cars. They will start at 23% of the cars and more after that. They plan on importing them to the USA so you and I can buy a Chevrolet built in China. This is what the new GM ceo said at a news conference. You can't use the name to know where it's built.
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6-13-2009 @ 8:10AM
illsell4u said...
You had to know sooner or later the car companies would figure out a way to beat the unions. It is a shame that the there is so much money that goes into the union built into every car that it is now cheaper to build the cars in China and pay to have them shipped here.
TAX AND SPEND LIBERAL ATTITUDE. Tax the car by having to raise the price so you can spend by overpaying the people that make the car. Sooner or later you have taxed your way out of being able to sell the car. Why do the unions favor the dems? It is the SAME socialist principle. Take from one group so you can give to another. Ask any unemployed union worker now if they would rather go back to work making 1/2 what they were making WITHOUT paying any union dues or would they rather sit at home making NOTHING.
A couple decades ago MADE IN JAPAN meant it was a piece of junk. Now, if it is made in Japan chances are very good it is a superior product.
Today China is where Japan was 30 years ago entering the US auto industry. With well over a BILLION chinese we had better watch out. With proper quality supervision they could easily crush the US auto industry. All they need is to show they are willing to build the cars for 1/10 the wages and give a quality product.
MBL
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6-13-2009 @ 8:18PM
gregsachiko said...
Good point on the quality issue. JD POWERS is over in Korea consulting on how to build a quality car by consulting them and teaching them.
My point being is that we Americans think we do not have to listen because we are the biggest and baddest thing on the planet!!!
Greg-san
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6-14-2009 @ 1:24AM
Susan said...
Mike,
I just read your post 1:10 am on Sunday. I'll comment tomorrow. (I'm sure that you can hardly wait...lol).
I need sleep...
Susan
PS - I may start using a fake name. Someone keeps posting comments that are not mine. I have posted lately tho so it is confusing.
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6-14-2009 @ 7:23AM
illsell4u said...
There is a small chance there is just another person named Susan writing in without mallicious intent. At one time Ron used his Yahoo account name to post. It is an original name with little chance of someone ACCIDENTALLY using it. There are at least two other MIKE's that post. One is Mike, and one is mike. Too common of a name so I do not use my first name to post but my AOL screen name.
Any ways, I look forward to it. I counted yesterday and think there are 33 out of the 43 drivers in Sundays race driving either a GM or Dodge. There is certainly going to be an impact on Nascar if GM and Dodge drop their support in full.
mbl
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6-14-2009 @ 6:12PM
Susan said...
Mike, I have heard rumors that there might be other women, around my age, with my name. :)
Greg, Ford did not take bailout money. Ford did not take bailout money...
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6-15-2009 @ 12:06AM
Susan said...
Chevy announced they were scaling back involvement in all 3 series including Sprint Cup. That's 125 million a year but they didn't say what amount they are taking away. (RaceDay on Speed Sunday morning.)
The
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6-15-2009 @ 1:23AM
daddywagsx2 said...
I will preface this by saying I have 2 GMC's in my garage and I am a NASCAR fan. That being said; Anyone that still buys into the tired and worn out adage of race them on Sunday buy them on Monday needs to check their med's. That stopped when you could no longer buy a car like the one you watched racing on Sunday. The rules were the manufactures had to sell a certain amount of the cars that were raced in NASCAR. As a taxpayer I am not happy bailing out anyone especially the automakers. I think the ones bailed out should not give any of my tax money as support to race teams. Oh and for those that want to jump on me about saving American cars just remember Chrysler / dodge is now partially owned by an Italian car company. Nascar and the race teams easily could get the support and sponsor money back from dodge and G.M. In fact the Government would insist on it. how you ask? Simple, all they would have to do is unionize and the government would give them anything they want and more.
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