GM cuts extend to Sprint Cup teams

[Sparky1329]

I was waiting for this other shoe to drop.


By how much, GM isn't saying.

“Chevrolet's involvement in racing is a sound business decision that translates directly into the sale of cars and trucks,” a GM spokesman said in a statement Wednesday. “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.”

A top Sprint Cup team's budget reportedly is in the $20million-$25million range per year.

“We had very productive conversations this week with the folks at General Motors, and it's clear they are committed to racing and committed to our organization,” said Hendrick owner Rick Hendrick. “They've asked us for some help, and we're going to give it to them. We're proud to be a Chevy team, and we will do our part to support the new GM both on and off the race track.”

You can read the rest of the article here:

http://www.thatsracin.com/140/story/11971.html

[Jag_Warrior]

I was waiting for this other shoe to drop.



You can read the rest of the article here:

http://www.thatsracin.com/140/story/11971.html

Yes, the other shoe dropping was inevitable, especially since GM is very slow on paying suppliers right now. If they can't pay the companies that actually supply the parts used to build their cars, spending in non-core areas HAD to be addressed.

Despite the fantasies that are appearing on some other boards (particularly the IRL board on a certain network's website, which covers the Truck series and has lots of NASCAR content *wink wink*), I don't believe there are any nails in NASCAR's (nonexistent) coffin. Spending is going to be cut by the auto manufacturers (including Toyota, from what I understand). And ratings are an issue. But this is more like when Apple Computer stock took a tumble. It got too far ahead of itself and backed off. Fundamentally, it was still sound... as is NASCAR, IMO.

This topic actually came up on Bloomberg yesterday (BTW, when's the last time that any other American racing series was spoken of on a financial network? Maybe when the NHRA was set to be bought out by the private equity group?). The gentleman speaking had Honda as one of his clients. According to him, NASCAR is courting some of the foreign manufacturers as sponsors, if not as series suppliers. He seemed to think that Honda could be the next manufacturer in NASCAR, if & when that decision is pushed for a vote. I think it's going to be FIAT, if they ever get the Chrysler deal off the deck - because I've heard that Chrysler may get rebranded as FIAT. But there's nothing that says Hyundai, Kia, Subaru or even Mercedes can't be brought in as sponsors. NASCAR was doing a pretty decent job of expanding its demographic reach. The last report I read though, that had sort of fallen off. I wonder who took their eye off the ball?

Even if GM lives through this, it's going to be a fraction the size that it has been. So I don't look for those dollars to come back anytime soon. I think they'll have to be replaced by team sponsors, and the teams will have to do more of their own heavy lifting.

[willracefan]

so does this mean rcr needs to move on to another manufacturer to be competitive again?

[Jag_Warrior]

4 of the Top 5 in driver points are in Chevys. I think RCR's problems are largely unrelated to GM. I'm not sure where RCR would go. Ford is cutting. Toyota is cutting. And FIAT/Dodge is ??? But if Honda comes in, I'd say RCR is an organization that they'd throw some bucks at.

[ms0362]

The stands are getting bare, the money is drying up. I'm predicting that there won't be a Truck nor a Nationwide series next year. Plus NASCAR is going to have to completely re-think the Cup series. Drastic program and competition changes are on the horizon.

[Jag_Warrior]

It's funny that I've been hearing that the truck series "is going under next year" since about 1999. To me, it will always be the Craftsman Truck Series - IMO, the new name sounds goofy. But the sky is not falling. The money is not drying up. All of the NASCAR series (including Grand Am) have title sponsors. All have relatively healthy fields at every single race. Attendance and TV ratings are down off their lofty levels (for Sprint Cup). But it's extremely premature to be ordering flowers for any of the upper tier NASCAR series at this point.

I do think many teams will have to adjust their budgets though. The rule of racing is that whatever a team has to spend, it will spend that amount. The two or three NASCAR teams that I'm relatively familiar with waste incredible amounts of money and resources. They are the opposite of efficient businesses. That will probably change going forward. But the sponsors aren't dropping out en masse. Most corporate sponsors have suffered during the recession. But other than the ones (like GM and Chrysler) that have declared bankruptcy, there's no reason for them to completely abandon the second most watched sport in the U.S. FIAT is deciding as I type how to proceed with Chrysler's NASCAR program. And as GM has decided to proceed (as reported during the Le Mans broadcast) with the GT2 Corvette ALMS program, I don't see much chance that they're going to cancel any NASCAR programs wholesale.

[Jonesi]

If things get real tight for the Truck series I could see Nascar going back to the rules from the first year. Red flag at half way for 15 minutes so drivers can get out to service their on truck. A crew of 1 or 2 is much cheaper than the 7 over the wall plus others.

[Wade91]

nascar needs honda to come in