Sunday, May 31, 2009
Bankruptcy won't keep GM out of NASCAR
DOVER, Del. -- NASCAR's sky will not fall with the bankruptcy of General Motors, any more than it has fallen with the bankruptcy of Chrysler -- which continues to race its Dodge brand.
To be sure, there's enough information out to set the Chicken Littles scurrying around the newsrooms.
But that very information is what assures me that GM's racing brand of choice, Chevrolet, will go on in NASCAR.
News agencies are reporting that GM will file for bankruptcy at 8 a.m. ET Monday, and that shortly thereafter, President Barack Obama will tell the nation that the United States government is taking a 60 percent stake in GM, with the Canadian government taking 12.5 percent, the United Auto Workers healthcare trust 17.5 percent, and bondholders 10 percent.
That pretty much wipes out GM as we've known it.
But it also assures that GM and Chevrolet as brands will go on, whoever owns them.
The U.S. and Canadian governments aren't going to let GM go under, because too many American and Canadian jobs would be lost. That would devastate North American society far worse than just messing up a sport like NASCAR.
And as long as GM is a brand, it will race. It can't afford not to, any more than Chrysler could afford not to.
Through three different Chrysler financial phases, Dodges have continued to race -- under DaimlerChrysler, then under private investment when Daimler-Benz retrenched to Mercedes-Benz as its core business, and now in bankruptcy restructuring.
Still, just to be sure, I bombarded the biggest Chevrolet racer in the history of NASCAR, team owner Rick Hendrick, with doomsday scenarios Sunday night after one of his Impalas, driven by Jimmie Johnson, had won the Autism Speaks 400.
What if the government should tell GM it must withdraw from promotional spending in NASCAR?
"What if GM tells you, 'Rick, we can't give you another penny for the foreseeable future?' Do you have a Plan B?" I asked.
What I meant was, Hendrick is powerful enough -- just as a retail car dealer, let alone a racer -- to make a deal with Toyota, Dodge or Ford, the other three NASCAR competitors, anytime he wants to.
Hell, the guy could race Mercedes-Benzes, BMWs or Hondas if NASCAR rules were conducive to it. He's got that many dealerships for those brands.
He looked me in the eye, and he said, "My Plan A is Chevrolet. My Plan B is Chevrolet. And my Plan C is Chevrolet."
No one in NASCAR has higher or closer connections with GM than Hendrick, though he never flaunts them. He's been dining privately with GM chairmen and CEOs since the days of Roger Smith. That's more than 20 years.
"I've had no indication they're going to cut back," Hendrick said of GM's NASCAR operations.
As Hendrick understands it, "there's a plan, a get-in, get-out situation," Hendrick said. "I'm hoping that if it happens, they'll get in and get out [of bankruptcy] in a hurry."
Hendrick pointed out that the worst economic downturn since the Great Depression has affected all manufacturers in NASCAR, and "you see Ford and Toyota and Chrysler, everybody's [still] here."
That's because they have to be. The situation has grown far graver than the old "Win on Sunday, sell on Monday" line. If you want to sell American cars at all on Monday, you have to race them on Sunday. That's the only real appeal you have left.
The brands with which Chevrolet has to compete in the showrooms -- Dodge, Ford and Toyota -- are still here. So GM must stay.
The fears of the government pulling the plug on NASCAR began with the inimitable Massachusetts Congressman Barney Frank, questioning whether bailed-out companies should be spending government money on sports promotions.
But there's a vast difference between having "Chevrolet" or "Ford" signage at a golf tournament or a baseball game, and participating in the very endeavor you sell: automobile performance.
Stopping the manufacturers from participating in NASCAR would be like telling Titleist, Callaway, Taylor and Ping that they can no longer support PGA or LPGA players.
The government, no matter how recalcitrant, will have no choice but to understand that if GM wants to sell cars, it must race.
"The numbers are really clear that NASCAR, almost more than anything else, drives sales for GM and the other manufacturers," said NASCAR spokesman Ramsey Poston. "It's one of the things that works better than anything else for them to gain exposure and sell cars. They're reaching over 100,000 fans in person at the track, and an average of almost 9 million fans on television every weekend."
At manufacturer bankruptcy, "We have a little experience," Poston said. "Obviously Chrysler is going through restructuring of their own, and they continue to put their resources, and compete, and market, through NASCAR."
From 1971 to 1980, NASCAR ran with virtually no factory support for teams -- just a little "out the backdoor" sheet metal and a few engine parts. NASCAR did fine that decade.
And so far, NASCAR isn't even at the brink of complete withdrawal of factory support.
So on Monday morning, the sky may be grayer, but it isn't even close to falling.