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GM's NASCAR racing cuts? Might not be as deep as everyone worries

GM's Mark LaNeve, one of the company's point-men (Photo: GM)

   By Mike Mulhern

   SONOMA, Calif.
   How deep are GM's cuts in NASCAR really going to be?
   Nobody wants to say.
   However there are indications that GM's racing cuts may not in fact be as deep and tough as recent reports might indicate.
   Are General Motors executives and NASCAR teams just being PR conscious, or just disingenuous, when talking about racing budget cuts, because of GM's Chapter 11 bankruptcy?
   After repeating the manta that 'we don't discuss business relationships with partners,' GM now is giving more than a hint of what's really going on: Mark Laneve, GM's vp for North American sales, service and marketing, says the company will continue spending about the same amount of money on advertising and marketing, per unit, in bankruptcy, as it has been -- "about $40 million to $50 million a month."
   That would stand in stark contrast to how the Obama administration handled Chrysler's proposed marketing budget while in bankruptcy – the Chrysler budget was cut in half. Chrysler was allowed to spend $67 million during the nine weeks it was to be in bankruptcy.
    What that all really means, of course, is not clear.
   Three-time NASCAR champion Jimmie Johnson says he's still not quite sure what's going on between GM and NASCAR: "I know that the relationships with the drivers and the manufacturers are still being determined now. So I don't know specifically how it impacts me or Hendrick Motorsports yet, and I think in the next week or so we'll know a lot more.
    "I certainly hope that the relationships are still there and we're able to maintain them and want to continue that relationship.
    "And regardless of what it is, we're going to do our best to represent GM and help them get back on their feet and show how important motorsports is for their marketing program."
   Jeff Burton says he's likewise uncertain about just what is going on: "Richard (Childress) and I haven’t had a chance to talk. We’ve been playing phone tag. There was a meeting this week obviously. The details of those meetings I know the fringes of it not the details of it so there’s not a whole lot I can comment on. The only thing I will say is Chevy has been a great partner of ours and will continue to be. This is a difficult time for them therefore it’s going to be a difficult time for us too because we are partners. They are committed to doing everything they can to do the best they can in a bad situation."
   Mark Martin says he's trying to look big picture: "I will tell you what I know and I will kind of work backwards on that. Being a dealer, I’m real excited, really, really excited that the company is going to emerge from this better, stronger, leaner and with really exciting products coming down the pike. I’m excited to be one of the dealers that managed to make the cut.
   "I’m new at Hendrick and I really don’t know exactly what his deals are, other than he’s committed to GM 100 percent, and I do know that GM is committed to NASCAR and Hendrick Motorsports.
     "I do know that, and I do know that they asked for some relief right now, and Mr. Hendrick is happy to provide some relief.
     "I know the commitment is very, very strong.
     "I think I know the level, or the round-about area, that manufacturer’s involvement is in a race team's overall budget... and for most race teams I don’t think it will put them out of business, if you know what I mean.
     "I don’t want to minimize it. I’ll say that everybody is feeling pain, and all the race teams are having to...Right now we’re experiencing a correction, just as the stock market, or just like your average citizen. Many of the people that are fortunate enough to be keeping their jobs may have to take a cut in pay.  This is kind of the same thing.
     "It’s just a correction that they’re going through, and I think all the race teams will weather it; they’ll just feel some of the pain that everyone else feels in this market and this economy."
    Ryan Newman said the GM-NASCAR puzzle is wait-and-see: "How it affects racing? Financially, we will have to see. I don’t think Ford and Toyota have had quite the situation that GM or Chrysler have had, so I don’t know. I know it has more so affected the Truck series situation a little bit more than it has the Cup series, but it isn’t a good thing.  Everything cycles; we will cycle out of this. It is just a matter of how long it takes and when that affect -- if it is six months down the road, or three weeks down the road -- if that change has an effect on the racing and the teams. I don't know. We'll see."
   Tony Stewart, like most NASCAR men here, is trying to put the best face on the very confusing and upsetting situation: "We'll make it through the year, for sure. It's like we've said before, we're supportive of what Chevy had to do. There are a lot of people that don't even have jobs, and we just got our budget cut, percentage-wise.
    "So we're still getting support from Chevy, and we're proud of that. We'll look at all the numbers and figure out what we have to do to get done what we have to get done with the race team.
    "But it's hard. It's a hard situation for them. You could see it in their eyes when they came to the shop. It's not a meeting that they wanted to have. They didn't want to have to tell us that we were going to have to take a cut, but at the same time we understand why and we're very supportive of that."
     But Stewart points out that in NASCAR racing money has to go to more things than just performance: "You have to keep in mind that some of it is things that don’t necessarily make the race car go faster but it makes the sponsor happier.
"If it’s the appearance of a tool cart, or if it's curtains that go over the side of these boxes when they’re sitting out there and have their logo on it, those are things that some would consider a luxury, but at the same time it’s part of what you have to do to make the sponsor get value in the dollars they’re spending.
    "So it doesn’t always pertain to what makes the race car go fast. That’s why you have to sit there and take that budget and say 'Okay, this is what we’re going to allocate for each of these departments.'
     "You just have to sit down and re-budget everything, and try to figure out exactly where those funds need to go."



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