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.

ONLY ONE-IN-FOUR CHANCE OF AVOIDING DETROIT 3 BANKRUPTCY

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In the wake of the legislative branch’s abject failure to hog-tie the United Auto Workers union and pass necessary bridge loans for the Detroit 3, the U.S. Treasury Department is busy working on a TARP-based interim Detroit 3 aid package.It’s shaping up to be a rehash of the plan that passed the U.S. House, including a “Car Czar” with the power to force bankruptcy.

In other words, “meet the new boss . . . same as the old boss.”

The emerging Bush plan does what the U.A.W.’s Ron Gettelfinger and his strike-happy cronies anticipated – it merely passes the ball to the union-beholden OBAMAcrats.

According to Bloomberg,

“The likeliest U.S. aid package will be loans and a so- called prepackaged bankruptcy to get the automakers through to 2009, Moody’s Investors Service said in a note today. There’s only a one-in-four probability the U.S. will bail out the automakers with no bankruptcy, analyst J. Bruce Clark said.”

Treasury Secretary Henry Paulsen – apparently no fan of using any TARP money to help the Detroit 3 weather the financial and regulatory hurricane created by previous federal policies and market tampering – uses the “long-term viability” code wording for coerced U.A.W. give-backs:

“The terms would be very critical, and we would have to assure ourselves that this was a step on the path to long-term viability.”

Of course an Obama-controlled Treasury Department would have virtually no force to make the U.A.W. accept across-the-board, market-based wages and benefits by early 2009, if ever. Yet under the emerging Bush plan, the Treasury Department would function as the de facto “Car Czar” and could (theoretically) force bankruptcy if the participating members of the Detroit 3 failed to demonstrate “long-term viability” by late March 2009.

In practical terms, however, the Bush plan would be a “toothless tiger.”

Why?

In short, because of Barack Obama and his fealty to organized labor.

Most certainly, Ron Gettelfinger and other union hacks would pressure the OBAMAcrats against forcing bankruptcy (pre-packaged or otherwise) without substantial guarantees of a wage and benefit premium for pre-existing U.A.W. members and/or swift passage of the anti-secret ballot “card check” legislation.

Sensing this, the politicians beholden to non-union Southern “invader” auto plant interests continue to campaign vigorously against any help for the Detroit 3.

One of the latest to join the Richard Shelby-ite “just say no” chorus is South Carolina Governor Mark Sanford: Sanford wrote President Bush yesterday to “not to consider the bank bailout fund for automakers because it would open the ‘floodgates’ for other troubled industries.”

“We are at a tipping point in moving from a market-based economy to a politically based economy,” Sanford said.

Sanford’s state is host to a B.M.W. “invader” assembly plant that was built with SUBSTANTIAL public aid:

In 1992 South Carolina ushered in the new wave of investment by foreign carmakers in the South by offering BMW a package that was ultimately worth an estimated $150 million. A decade later, the state put up an additional $80 million in infrastructure aid when BMW decided to expand its operations in the state.

Sanford and the Shelby-ites also wholly ignore the pervasive federal role in weakening the Detroit 3 through decades of wrong-headed anti-trust, trade, labor, energy, tax, and foreign policies and anti-market-based regulation. To suggest that the Detroit 3's problems are solely “market-based” is ludicrous, if not empty-headed. There has been no true “free market” in light vehicles for decades.

Sanford and the Shelby-ites also ignore the critical importance of the Detroit 3 to America’s basic industrial capacity. They ignore the virtual impossibility of recreating any of the Detroit 3 in any reasonable period of time should they be liquidated. They ignore the virtual certainty of double-digit unemployment and a economic depression should the Detroit 3 fail.

Instead, Sanford and the Shelby-ites maneuver their political rhetoric not for level-headed, principled policy reasons, but for political and parochial gains. They are not looking out for our national interest. They are no better than the greedy pirates at the U.A.W. in developing a solution for a crisis of political creation.

The drums of Chapter 11 continue to sound. But the emerging question – assuming that the Bush Administration staves off the immediate, forced bankruptcy threat – is: Will the OBAMAcrats get tough with the U.A.W. and/or force the Detroit 3 into bankruptcy to address the wage and benefit disparity problem?

Don’t count on it.

SENATOR COBURN: COLLAPSE OF DETROIT RESCUE WAS THE U.A.W.'S FAULT

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Matt Drudge has linked to a report quoting Senator Tom Coburn (R-OK) as saying:

“As far as the failure of last night, it solely lies on UAW,” . . . “All we asked was, ‘Just give us a date at which you will have competitive wage rates. We will put it in and that’s what you will have to meet.’ They would not move. They would not renegotiate their contract with GM as far as wage rates.”

The comments of Senator Coburn confirm the obvious. However, because Senator Coburn represents a state which no longer has meaningful ties to the Detroit 3 and which is not unduly influenced by the need for protection and local subsidy of foreign invader assembly plants, his views provide a more unbiased perspective on the Detroit 3 rescue package and what was actually possible if all of the stakeholders had been willing to do their parts.

Ron Gettelfinger's mob refused to meaningfully consider wage and benefit normalization on a realistic time table. Instead they sought to protect the feather beds of a few old-guard unionists until 2011.

This hidebound obstructionism is wholly divorced from the economic realities of the global light vehicle marketplace and doomed bipartisan legislative efforts to help Detroit cope with the World liquidity crisis.

THE WAITING GAME: STICKING A CORK[ER] IN IT.

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The Detroit 3 automakers are still waiting for President Bush to act on granting short-term relief from the crisis that Washington politicians mostly created.

Meanwhile President Bush ducked shoes thrown by the Egyptian press in Iraq (and undoubtedly everyone in the de facto OBAMAcrats propaganda ministry (a/k/a “newsrooms”) at the New York Times and NBC cheered).

Tennessee Senator Bob Corker continued to push for the “poison pill” condition of near-immediate pay and benefits equity between the Japanese invader auto plants and the Detroit 3 plants hostage by the concessions-weary United Auto Workers union.

Do-nothings such as Alabama Senator Richard "Tokyo Rose" Shelby still do the bidding of the government-subsidized Japanese invaders by standing against any intervention whatsoever to help the Detroit 3 cope with the Federal and state governments’ decades of bleeding the lifeblood out of the Detroit 3 with scores of bad policies, outright market tampering (e.g. Corporate Average Fuel Economy standards) and $100,000,000,000.00+ in unfunded mandates.

U.A.W. boss Ron Gettelfinger and his henchmen, along with a small phalanx of fellow-traveling OBAMAcrat pundits on cable television, continued to defend their collective rejection of market-based wages and benefits for the Detroit 3.

In other words, General Motors and Chrysler are left twisting in the wind on nooses tied by Congress and the U.A.W.

And they are incurring millions in pre-bankruptcy planning expenses and legal fees during the delay.

Gettelfinger, who would be a finalist for the Heisman Trophy of Stupid if it were awarded, is attempting to wait out the clock on the Bush Administration and the current Congress. He’s "betting the farm” that Bush will write a $15,000,000,000.00 blank check before year’s end to stave off the imminent bankruptcies of both Chrysler and GM.

Gettelfinger seemingly believes that if the over-paid and increasingly unpopular U.A.W. can just make it to the “promised land” of Obama’s inauguration, then the glory days of strong-arm labor tactics will receive a sudden rebirth in America.

Why the delay? Why play the waiting game? Why the apparent gamble?

In the fantasy world of Ron Gettelfinger and the hard-core, anti-management union bosses, all of the Detroit 3's structural problems will evaporate when the OBAMAcrats banish the secret ballot labor election and require employers to allow labor goons to infect non-union companies with adversarial unions through a public sign-up sheet.

Gettelfinger apparently believes that the Japanese invader assembly plants will suddenly become unionized when all U.A.W. muscle has to do is hector and intimidate a mere majority of “scab” workers into signing a union card in public. Then the U.A.W. will be empowered to run the same sorts of “pattern bargaining” hijacks against Toyota, Honda and Nissan that have proven so costly against the Detroit 3 for the past 60+ years.

Gettelfinger also may be planning to off-load a significant portion of the Union’s “VEBA” obligations onto the Feds, as everyone associated with parasitic “organized” labor dreams for nationalization of health care and “reform” of the pension system. If the costs of the U.A.W.’s platnum-plated benefit plans are spread across industry, then the Detroit 3 wouldn’t be so disadvantaged in comparison to their invader competitors (conveniently forgetting about the growing disparity in production costs between American versus off-shore plants that are outside the extortion of U.S. labor unions).

Gettelfinger also expects the OBAMAcrats to gut NAFTA and reign in so-called free trade under the pretexts of U.S. environmental and labor standards.

Accordingly, Gettelfinger and his looters (and the scores of OBAMAcrats who are beholden to them) understand that the dead-on-arrival Corker plan is “kryptonite.” The argument goes “if unionized workers can’t get more pay and better benefits than ‘scabs,’ why would anyone ever join a union again.”

Of course the inherent stupidity of relying on that argument in the current environment is obvious:

It increases public skepticism and disdain for unions.

It implies that unionization is really nothing more than shaking down employers for more than prevailing market levels of wages and benefits.

It assumes that even if “OBAMA Claus” stuffs the AFL-CIO/Teamsters stocking with the anti-secret ballot “Card Check” legislation, the U.A.W. will still somehow fail to unionize the invader assembly plants.

It ignores all of the other functions that unions allegedly perform for their members.

More importantly, it focuses the American electorate on U.A.W. greed and hubris at the rotten heart of the Detroit 3's problems. Such tone-deaf U.A.W. rhetoric and head-in-the-sand selfishness is killing off more consumer interest in union-made Detroit 3 products than perhaps even a bankruptcy filing would.

If Gettelfinger really had any faith in the grand schemes of organized labor being adopted after Obama occupies the White House, then he’d take the Corker gamble for the sake of public relations, knowing that unionized invader plants would soon become a part of the U.A.W. fold and anticipating a new round of “pattern bargaining” with the Japanese.

On the other hand, the Japanese have been known to shutter plants rather than give in to union arm-twisting (see e.g. Bridgestone-Firestone). So perhaps Gettelfinger doesn’t really believe Obama will deliver enough “change” to suit the U.A.W.

Thus, the U.A.W. is ironically banking on a weakened president that they’ve consistently opposed and whom they vehemently hate to “push the ball” into 2009.

Lame duck President Bush, for his part, seems to be playing along with Gettelfinger’s gamble:

"An abrupt bankruptcy for autos could be devastating for the economy," Bush told reporters aboard Air Force One during an unannounced trip to Iraq and Afghanistan. "We're now in the process of working with the stakeholders on a way forward. We're not quite ready to announce that yet."

Senator Corker, however, mistakenly expects President Bush to be more resolute.

“Corker urged the White House to seek similar concessions from the auto companies and their unions in return for the money. ‘Of course, the benefit they have - they don't have to negotiate. They can say this money is available but it's only available under these conditions,’ he said in a broadcast interview.”

Given the minimal time and the razor-thin G.O.P. strength in the legislative branch, Corker’s position is a pipe dream.

Unless President Bush is prepared for the extraordinary step of using his powers under the Taft-Hartley Act (which would be immediately undone once Obama reaches office), Corker’s “cram down” plan simply will not work outside of Chapter 11. Gettelfinger's bunch undoubtedly knows that. In bankruptcy, of course, a politically-insulated judge would be the barber poised to give the U.A.W. its “haircut.”

Clearly, none of the alternatives are attractive. Letting GM and Chrysler fail – actually to be sacrificed on altar of partisan politics – and pushing the U.S.A. into a depression is unconscionable. But giving Gettelfinger and the anti-free market U.A.W. a free pass is noxious.

President Bush will probably blink in the U.A.W.- G.O.P. staring contest. "'I think it's very likely the White House will do what it said it's going to do, not allow the auto industry to collapse,' said Sen. Carl Levin, D-Mich., among several auto state lawmakers optimistic about the funding."

Then it becomes Obama’s problem.