Thursday, December 18, 2008

HUGE CUTS IN DETROIT 3 NASCAR SPENDING MAY BE JUST THE FIRST STEP

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Each of the Detroit 3 are making significant cuts in their spending on NASCAR racing for 2009.

Ford Motor Company's NASCAR budget will be a whopping TWENTY PERCENT less. Chrysler's spending may be off by more than thirty percent.

But as GM and Chrysler cut production and extend the Christmas break to conserve cash, both companies are (thus far)resisting the call to abandon NASCAR.

Undoubtedly, the Detroit 3 have a love-hate relationship with NASCAR. They love the attention that NASCAR provides. They love the free television media. They love the venerable idea of "Win on Sunday and Sell on Monday," even if it is strongly undercut by the fact that there's virtually no relationship whatsoever between a common-template NASCAR and anything sold to consumers. They love the squeaky-clean corporate image and networking opportunities in the luxury boxes that now typify the sport. And they love the fact that NASCAR racing still tends to prompt some degree of brand loyalty.

Of course, they undoubtedly hate the lack of relevance NASCAR has to showroom products. And they probably hate the expensive "arms race" with Toyota, as well as the insatiable greed and profligate spending of NASCAR's super-teams. Undoubtedly they hate the France Family's stranglehold on American racing. Surely, they hate how Brian France has managed to kill most of what was beloved about the Old NASCAR. They hate the lack of brand loyalty of NASCAR's "guns-for-hire" drivers. And they hate the fact that the NASCAR haters and millions who hold all motorsports in contempt believe that spending money on NASCAR is a huge waste.

The NASCAR funding cuts are an attempt to balance the new economic realities and NASCAR criticisms with the marketing benefits of staying in the sport.

Most certainly, the Detroit 3 will be looking carefully at the impact that NASCAR cuts have on sales. For Dodge, the results on-track have been so poor, no one is likely to notice much from the cuts -- a few fewer backmarkers in Dodges than last year, perhaps. Whether the Detroit 3 cuts will derail any of the super-teams, such as Roush or Hendrick, however, will be closely studied.
If the Detroit 3 see no sales impact from the cuts, then look for additional cuts.

If a "Car Czar" is appointed, it's possible that the Feds may have veto power over the Detroit 3's NASCAR activities.

Undoubtedly the radical greens and some soulless accounting types will point to the millions spent on NASCAR as being as wasteful and tone-deaf as those infamous Detroit 3 corporate jets.

A powerful "Car Czar" could force GM and Chrysler to slash all NASCAR funding as a condition to federal loan assistance. In fact, a "Car Czar" might impose a reprisal of the horrific 1957 A.M.A. "Racing Ban" in order to kill off all Detroit 3 participation in motorsports.

Some have pointed out that Brian France's COT doesn't really need any OEM manufacturers. A common-spec aftermarket engine is virtually imposed by the rules. If the Detroit 3 go away, will NASCAR adopt the IRL spec-racing model?

Or will NASCAR respond to the budget cuts and increase in part-time teams with cuts in the size of fields, fewer events or other cost-saving strategies?

To be sure, this round of cuts are likely not the last. And reduced Detroit 3 involvment will surely change the face of NASCAR.

The question for Ford is: will Ford "seize the day" as GM did when Chrysler and Ford abandoned NASCAR in the 1970s?.

Don't count on it.

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