Sunday, August 03, 2008
Teams wary of GM woes
With Detroit carmakers losing $15.5 billion last quarter, NASCAR teams are preparing for a potentially shaky future.

Associated Press
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General Motors plans to cut $10 billion. Ford lost $8.7 billion in three months. Chrysler, which operates Dodge, saw its U.S. sales decrease 22 percent in the first half of this year compared to the same time last year.
It's numbers like those -- and GM announcing Friday it posted a second-quarter loss of $15.5 billion -- that creates concern among NASCAR Sprint Cup teams. Some have made contingency plans in case the Detroit companies alter their longstanding support.
Cup teams rely on manufacturers for financial and technical support that total more than $100 million per car company, according to a recent USA Today report. Without such support, many small and mid-size teams would face greater struggles.
Larger teams would not be affected as much because they have the resources to remain strong, widening the competition gap.
Toyota teams don't have as much to worry about. While Toyota also faces declining sales, it does not have as severe financial issues as its competitors.
"The team owners, I would be a little nervous about the position that the car companies are in to be able to provide the resources to develop [racing] technology," said ESPN analyst Andy Petree, a former Cup owner.
All three Detroit manufacturers give no indication that they'll leave NASCAR. The sport remains the country's top motorsports series in terms of attendance and TV ratings, and it's hard to ignore all those consumers. But with losses mounting, each car manufacturer must assess how much money it puts in each program.
"We still see racing as a significant return on our investment and that's why we're still in it," says Doug Hervey, North American Operations Manager for Ford Racing Technology. "We're still in the planning stages for the future but as it looks right now we'll be in the sport."
Questions have been raised about General Motors. When company officials announced plans last month to cut costs, its motor sports program was mentioned. In the Cup series, GM backs Hendrick Motorsports, Richard Childress Racing and Dale Earnhardt Inc., among others. With Tony Stewart becoming a part owner next year of a Chevrolet team, it's likely his team would see increased support from GM since the company wouldn't want a two-time series champ to fail with its cars.
But what General Motors does will be based as much on the fans.
"When you look at what we do on track, we have three key principals," says Terry Dolan, manager of Chevy Racing. "We race to win, so if you're going to be there, you've got to do it properly. The audience that is there has to care about the involvement and we need to get a return on our investment.
"If we can successfully answer those questions, that puts us in a pretty good position. Keep in mind we've got a business to run. It's all about selling cars and trucks."
Mike Delahanty, senior manager of Dodge's Motorsports programs, says nothing has changed from Dodge but acknowledges "that everything is getting scrutinized."
Dodge officials promoted a one-team approach at the beginning of the season among its competitors. The company encouraged its teams to have that philosophy when the manufacturer returned to the Cup series in 2001 but teams drifted apart through the years. Delahanty says teams are sharing more now.
"They see what is happening," Delahanty says of the economic woes, "and they're planning for maybe [they] don't have as much discretionary stuff."
Mark McArdle, director of competition for Gillett Evernham Motorsports, already has done that.
"You're certainly having to look at scenarios that 12 or 24 months ago wouldn't have even occurred to you," he said. "This is not the first time I've been through it in my 30 years. I'd have to say that we're headed for a time that is as tough as it has ever been, but, no, we're not there yet."
Ford's Hervey admits his staff has become "leaner" but that means "we have to work smarter.
"We've deployed our resources in the appropriate manner to the teams that we see fit based on the need," he said, noting how the company helped Roush Fenway Racing improve its Car of Tomorrow program last year. "Right now, I can say we're providing as much support as [teams] can handle."
Life without manufacturer support is not easy. Bill Davis Racing crew chief Tommy Baldwin knows. He was there after Dodge pulled its support, accusing the team of helping Toyota develop equipment, and sued the team.
The agreement between Dodge and Bill Davis Racing that was to have run from 2000-05 was worth more than $20 million in sponsorship and payment for development work to the team. The contract called for Dodge to provide engine, body parts and accessories. Without that support, the team struggled.
"You've just got to watch your Ps and Qs," Baldwin said of having limited or no manufacturer support. "Maybe you don't hire as many people or maybe you don't buy as many tires during a test."





