General Motors is cutting factory support for Chevy teams competing in NASCAR’s Nationwide and Camping World Truck Series as the automaker restructures under Chapter 11 bankruptcy protection, according to a story that will appear in Friday’s edition of SportsBusiness Journal. According to SBJ’s Michael Smith, who wrote the story, the cost-cutting measures are likely to have the greatest affect on larger organizations, such as Kevin Harvick Inc., which fields teams in both series, and Rusty Wallace Inc. and JR Motorsports, which field teams in the Nationwide Series. As Smith points out, support from manufacturers typically comes in the forms of engines, parts and cash. In most cases, factory support goes to larger, more substantial organizations, while smaller teams receive little assistance, if any. “Chevy’s (and GM’s) involvement in racing is a sound business decision that translates directly into the sale of cars and trucks,” an unidentified GM spokesperson said in a statement provided to SBJ. “It is essential, however, that we continue to look at every penny we spend as General Motors takes the necessary steps to become a leaner company with a significantly stronger balance sheet. While Chevy Racing is talking to its business partners about ways to reduce cost and maximize the return on investment, it is our policy to not talk about the details of business relationships with our partners.”(Sporting News)(6-12-2009)
UPDATE: General Motors is planning to cut back on its support of NASCAR teams in all of the sanctioning body’s professional series. Chevy spokesman Terry Rhadigan says GM, which is reorganizing through bankruptcy, is discussing what he described as incremental cutbacks in support. He says cuts will be made soon and that the discussions are “indeed NASCAR-wide.” Rhadigan would not say if one series would be affected more than others, nor would he say the size of the cuts or how much GM spends on NASCAR. The automaker, through its Chevy brand, provides cash and other support to teams including engines and parts.(Associated Press)(6-12-2009)
UPDATE 2: Statement from Kelley Earnhardt, vice president and general manager of JR Motorsports, regarding General Motors’ decision to discontinue its funding of JRM’s NASCAR Nationwide Series programs:
“Obviously the automotive industry is dealing with unprecedented business challenges, and we understand the need for restructuring to accommodate the need to reduce costs and maximize return. We have been proud supporters of the Chevy brand our entire lives and don’t anticipate that ever changing. We are fully capable of adjusting our business model to accommodate this change, and with the backing of Hendrick Motorsports, we will continue to lend our full support to Chevy. The manufacturer support GM provides at the NASCAR Sprint Cup level is more critical in nature than in the Nationwide Series, and I hope Chevy is able to continue supporting that level, as the promotion of NASCAR works well for its demographics.”Comment here
