Jul 21, 2008

When Automakers Get Sick, NASCAR Catches Cold

Make no mistake about it, the American car industry is sick, very sick, and it isn’t too big a jump of logic to think that NASCAR might come down with the disease as well. Right now the combined market shares of the Big Three automakers -- General Motors, Ford and Chrysler -- are at their lowest ebb since the dawn of the automotive age. Last week GM announced yet another major restructuring and cost-cutting program, and auto racing in general, and NASCAR racing in particular, could well be threatened by the continued poor fortunes of the three American car companies, which provide huge subsidies to NASCAR teams and tracks.  

One shoe has already fallen. According to an Associated Press report, this past week GM notified two racetracks that run NASCAR events that their current contracts will not be renewed as part of an overall $10 billion cost-cutting program by the automotive giant, which isn’t quite so giant anymore, and the feeling here is that the move is just the tip of the iceberg. If anything, Ford and Chrysler are faring more poorly than GM, so you can look for some serious cuts in their NASCAR racing programs as they struggle simply to keep the lights on.

Speedway Motorsports, a racetrack giant that hosts a substantial number of NASCAR events, has gotten the word that GM will not renew contracts at two tracks: New Hampshire Motor Speedway and Bristol Motor Speedway. But as the Big Three hemorrhage in the wake of an economic downturn accompanied by record-high gasoline prices, this might simply be the first volley in a deadly war. And the outlook is bleak, especially when one considers how dependent NASCAR seems to be on a healthy domestic car industry.

Only one import manufacturer, Toyota, has had the temerity to join the NASCAR fray, which has been the territory of the domestic manufacturers since long before Toyota was more than a speck on the U.S. automotive landscape. If the domestic automakers are forced to drastically cut their NASCAR spending, as could well be the case, it remains to be seen if other imports would step in where heretofore they have declined to tread. Because of that, this economic downturn is different than others NASCAR has weathered through the decades, because now like never before, the domestic automakers are threatened with extinction. At the very best, over the course of the next decade they are likely to be a mere shell of what they were as recently as the 1990s.  This could have NASCAR and NASCAR fans singing the blues before very long. Next Racing Rap>>