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http://hamptonroads.com/2008/11/declining-auto-industry-job-losses-have-racing-teams-concerned
Declining auto industry, job losses have racing teams concerned
By Dustin Long
The Virginian-Pilot
© November 8, 2008
AVONDALE, Ariz.
A cloudless blue sky and temperatures in the 70s made for a seemingly perfect Friday at Phoenix International Raceway.
It was, except for inside the NASCAR garage. There, concern is the prevailing wind and it’s blowing harder.
The sport faces as big a challenge as it has in the past couple of decades with a deteriorating economy making layoffs common among teams. Dale Earnhardt Jr., whose Nationwide team recently cut some employees, says an Internet report predicting as many as 750 crew members will lose their jobs after next week’s season finales in Cup, Nationwide and the Truck Series seems accurate.
Adding to the concern is the floundering auto industry. General Motors reported Friday a net loss of $2.5 billion in the three-month period ending Sept. 30. The auto manufacturer stated its cash level will fall significantly below what is needed to operate unless conditions improve. Ford reported Friday a net loss of $129 million in the third quarter of the year and its cash reserves dropped by $7.7 billion from the end of the second quarter to the end of the third quarter.
“It’s dire right now as far as cash flow, and we’re doing everything we can to help make sure what we’re doing is sensible and is moving us in the right direction,” said Pat Suhy, GM Racing NASCAR Group Manager.
Suhy stressed that GM will honor its contracts and long-term commitments with teams.
Tony Stewart returns to the manufacturer as a Chevrolet team owner next season, and he says the economic conditions are making it easier to find talented workers.
“It’s kind of like going to a buffet,” Stewart said. “You have so many people that are getting released from teams. All of a sudden, there is this huge talent pool. Some of these that are being let go are guys that are really high up in organizations.”
Rusty Wallace, who owns two Nationwide teams, says if he can’t find sponsorship to fully fund both teams, he could be forced to lay off half of his 40-person workforce.
“This thing is spiraling out of control financially,” Wallace said of the sport in general. “End of story. ”
Also this week, Hendrick Motorsports released about a dozen employees. Among those is points leader Jimmie Johnson’s spotter, who will stay on through the season. Teammate Jeff Gordon said the changes were normal end-of-the-year cuts that had nothing to do with the economy.
Things aren’t normal for most teams. Only 44 cars arrived at Phoenix, meaning only one, Joe Nemechek, failed to qualify.
The car count is a sign of the struggles teams have. The bigger issue is with the auto manufacturers. One team executive said while the sport survived years ago when manufacturers backed away, the sport wouldn’t do as well this time because teams rely on the money and resources from GM, Ford, Toyota and Dodge.
That money becomes even more critical as it becomes more difficult to find sponsorship. Only about 30 Cup teams are projected to have full sponsorship for next season as of now.
“I’ve heard everybody’s motorsports stuff is under review and under pressure to save money or not spend money,” Suhy said. “I think it’s going to be a sign of the times. It’s going to continue for some time. It’s not just us. It’s the sponsors, too.
“They’re much bigger than we are ... in the overall cash influx into NASCAR. It’s not just the auto manufacturers you have to worry about, it’s all of us.”
Declining auto industry, job losses have racing teams concerned
By Dustin Long
The Virginian-Pilot
© November 8, 2008
AVONDALE, Ariz.
A cloudless blue sky and temperatures in the 70s made for a seemingly perfect Friday at Phoenix International Raceway.
It was, except for inside the NASCAR garage. There, concern is the prevailing wind and it’s blowing harder.
The sport faces as big a challenge as it has in the past couple of decades with a deteriorating economy making layoffs common among teams. Dale Earnhardt Jr., whose Nationwide team recently cut some employees, says an Internet report predicting as many as 750 crew members will lose their jobs after next week’s season finales in Cup, Nationwide and the Truck Series seems accurate.
Adding to the concern is the floundering auto industry. General Motors reported Friday a net loss of $2.5 billion in the three-month period ending Sept. 30. The auto manufacturer stated its cash level will fall significantly below what is needed to operate unless conditions improve. Ford reported Friday a net loss of $129 million in the third quarter of the year and its cash reserves dropped by $7.7 billion from the end of the second quarter to the end of the third quarter.
“It’s dire right now as far as cash flow, and we’re doing everything we can to help make sure what we’re doing is sensible and is moving us in the right direction,” said Pat Suhy, GM Racing NASCAR Group Manager.
Suhy stressed that GM will honor its contracts and long-term commitments with teams.
Tony Stewart returns to the manufacturer as a Chevrolet team owner next season, and he says the economic conditions are making it easier to find talented workers.
“It’s kind of like going to a buffet,” Stewart said. “You have so many people that are getting released from teams. All of a sudden, there is this huge talent pool. Some of these that are being let go are guys that are really high up in organizations.”
Rusty Wallace, who owns two Nationwide teams, says if he can’t find sponsorship to fully fund both teams, he could be forced to lay off half of his 40-person workforce.
“This thing is spiraling out of control financially,” Wallace said of the sport in general. “End of story. ”
Also this week, Hendrick Motorsports released about a dozen employees. Among those is points leader Jimmie Johnson’s spotter, who will stay on through the season. Teammate Jeff Gordon said the changes were normal end-of-the-year cuts that had nothing to do with the economy.
Things aren’t normal for most teams. Only 44 cars arrived at Phoenix, meaning only one, Joe Nemechek, failed to qualify.
The car count is a sign of the struggles teams have. The bigger issue is with the auto manufacturers. One team executive said while the sport survived years ago when manufacturers backed away, the sport wouldn’t do as well this time because teams rely on the money and resources from GM, Ford, Toyota and Dodge.
That money becomes even more critical as it becomes more difficult to find sponsorship. Only about 30 Cup teams are projected to have full sponsorship for next season as of now.
“I’ve heard everybody’s motorsports stuff is under review and under pressure to save money or not spend money,” Suhy said. “I think it’s going to be a sign of the times. It’s going to continue for some time. It’s not just us. It’s the sponsors, too.
“They’re much bigger than we are ... in the overall cash influx into NASCAR. It’s not just the auto manufacturers you have to worry about, it’s all of us.”
translation: more revenue from speeding tickets when the interstate has a Double Fine variable speed limit set at 35 mph most of the time.