Jan
26
Woes of the Big Three to Impact NASCAR?
January 26, 2007 | Posted by VroomDude
In case you missed it, things aren’t too rosy for American automakers right now. Ford is losing more than a few billions of dollars a year and Toyota is poised to overtake GM as the world’s leading auto manufacturer.
The effects are already being felt in NASCAR, with increased whispering that Dodge may exit its involvement in NASCAR entirely, Ford pulling its long-running sponsorship of Champ Car, and Jack Roush challenging Toyota to a bare-knuckles brawl in the pits to settle this thing once and for all.
It’s escalating to the point that even people directly involved with NASCAR are starting to express concern, so it’s not just us bloggers with nothing better to do than to forecast doom and/or gloom:
At a time when NASCAR teams are making major increases to their research and development budgets to deal with changes in the sport, asking automakers to chip in even more money is a tough sell.
“It’s hard to get more, because let’s face it: Right now, business is not great,'’ said Dodge team owner Ray Evernham.
Evernham certainly could use the money. He and other teams are developing the so-called Car of Tomorrow, NASCAR’s new chassis design that could be more cost-effective for teams in the long run but is costing them millions to design and build right now.
Evernham also must keep an eye on Toyota, which is entering its first year in the Nextel Cup and has caused widespread concern that they will drive up the cost of racing.
In response, Evernham said Dodge has redistributed some of its racing budget, spending less on advertising and more on research and development.
“(They’ve) cut some of the frills so they could put more money into the engineering and development so they can make the cars go faster, so I applaud them for that,'’ Evernham said.
Dodge also offers teams technical help, including wind tunnel time and manufacturing expertise. They hope to help teams improve their performance without boosting their budgets — much like the automakers themselves are trying to do.
“I think the sport here is at a transition point,'’ Accavitti said. “It’s going to become more of getting the most you can for that dollar, rather than just throwing more dollars at it.'’
Contracts between automakers and teams are closely held secrets, but run well into the millions and can make up close to 20 percent of a team’s racing budget. Without that money, a team wouldn’t be able to survive in the long term.
On the bright side, it’s not like NASCAR is bleeding money and owners are scraping change out from under the couch to pay the electric bill. (Well, owners other than Robby Gordon, that is.) And, if this whole Car of Tomorrow thing lives up to its hyped promise (we’re not exactly holding our breath, but we’ll see), the cost of operating a competitive team should at least hold relatively steady over time, if not get a good bit cheaper.
And, indeed, it’s not like the auto manufacturing business is a steady, measured market with no peaks and valleys. US auto makers have appeared to be down and out before only to come roaring back. It’s a cyclical business by nature so there’s no telling where we’ll be five or ten years down the road, as Ford and GM could be back on top of the world, flush with cash, and virtually flinging it at teams.
The short run, though, will be interesting, especially since things are probably going to have to get even worse at Ford and GM before they get better. Keep your fingers crossed that it continues to have relatively little impact on the races every Sunday.