If the Big Three Detroit automakers are denied a government bailout and allowed to go into bankruptcy, it could mean a very bumpy road ahead for America's No. 1 spectator sport. If GM, Ford and Chrysler are forced to reorganize — or even to go out of business — some fear the wheels could come off for NASCAR.
NASCAR's stars — Jeff Gordon and Jimmie Johnson, among others — have been showing their support for the auto industry, urging their fans to contact their members of Congress to push through the $25 billion Detroit bailout plan.
"We're optimistic that Congress will help support the automakers and help them get through this very difficult time," said Andrew Giangola, Director of Business Communications for NASCAR.
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"It would affect NASCAR if the manufacturers were not with us. It would very strange to watch NASCAR and not see Chevy and Ford and Dodge racing around the track."
Along with the rest of the country, NASCAR is feeling the financial crunch right now. Hundreds of millions of dollars in sponsorship funds fuel stock car racing, and the money just isn't flowing in as it used to. On top of that, attendance is down by just under 10 percent, and some sponsorship deals have not been renewed.
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NASCAR Out of Fuel? General Motors is cutting back on sponsorships; Sears dropped its 13-year running title sponsorship deal for the NASCAR Craftsman Truck series; and AAA and the Army have left altogether.
In an attempt to cut costs across the board the sport recently banned off-season testing, in which teams use official NASCAR racetracks to test or tweak vehicles or for practice. It's expected to save each team $1 million, but it has also cost about 1,000 garage workers their jobs.
Venues, teams and the sport itself are competing against each other for the same sponsorships. Lower profile racing teams worry they won't have the funds to enter next season; higher profile teams are merging to share resources.
"NASCAR in general is at risk with a broad bankruptcy in the industry, and I think [not bailing out the Big Three] would just frankly take out NASCAR," said Dr. David E. Cole, chairman of the Center for Automotive Research, a nonprofit group that studies the industry.
"But assuming there's some sort type of bridge loan to the Big Three and we'll get stability in the credit markets, I think NASCAR will live and at least two of the Big Three will continue to participate."
"NASCAR has a very significant stake in these talks to develop some form of a bridge loan," Cole said.
Somehow, experts say, NASCAR will survive. If the bailout comes through, industry experts say the sponsorship money will still flow into the sport, just more slowly. But if it doesn't come through, they say, the sport could be set back by 30 years.
Even if the auto companies don't get their federal funds, there are still some large companies that will be flush enough with cash to continue their NASCAR sponsorships, and the big teams like Hendrick, Gibbs, Childress and Rousch will likely be able to keep fielding their well-known drivers. However, a lot of smaller teams, and some teams like Michael Waltrip's which have been well-funded but haven't shown much on-track success, may find themselves short of money.
For the record, I'm am a big NASCAR fan but I'm not a fan of the federal bailout. Pouring money into a business with as flawed an operation as the Big 3 is foolish. Unless and until those union contracts are renegotiated, it's not a question of whether they automakers will fail, but when.
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