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Geoff Smith: On the federal bailout of Detroit & banks, Formula One economics, meddling Washington politicians...and Jack Roush's own potential F1 plans
Greg Biffle accepts congratulations from teammate Carl Edwards after Saturday's Nationwide 300 win. Is it un-American to sponsor NASCAR teams...or is it un-American for politicians to diss sports marketing? (Photo: Getty Images for NASCAR)
By Mike Mulhern
mikemulhern.net
LAS VEGAS
If Bernie Ecclestone and those Formula One bigwigs really want an America-based F1 team, with an American driver, to help promote a possible F1 race in the United States, well, Ford's Jack Roush is ready to take them up on it.
Now Concord Regional Airport, which sits next to Roush's NASCAR base, may need a little more concrete, to stretch the 6,000-foot run to a 747-capable 10,000 feet. "But Charlotte-Douglas would be fine for those 747s," Geoff Smith, Roush's right-hand-man on the financial side, says, with perhaps a bit of a grin.
"Charlotte-Douglas is ready for all those 747s to come in from Europe.
"I love Formula One. When they raced in Detroit, I was still practicing law there, and loved to look at that technology.
"And we would be happy to be America's first Formula One team…if we got capitalized. Jack Roush could be a formidable competitor anywhere. With his engineering and management skills, we could be the American force.
"Jack Roush would race anywhere in the world that anybody challenged him to, as long as it made business sense. The guy lives to compete at every level: 'All right, get me all the money, and make sure I have enough to run for three years, and let's go.'
"And if you encourage him too much, he'll ask you about that every week."
Smith laughed: "I try to avoid him asking me that question."
The recent announcement by two F1 men about plans for a possible Formula One team to be based in the Charlotte, N.C., area has a lot of NASCAR veterans scratching the heads. The economics simply don't make much sense, not to mention the logistical challenges.
The world economy seems about as shaky at the moment as the U.S. economy, and finding enough money to play Formula One, well, that's got to be a big question here.
Then again the Formula One series itself is facing economic potholes.
Geoff Smith (R), here with President George Bush (L), Kurt Busch and Jack Roush, says any U.S.-based F1 effort may face an uphill economic battle (Photo:Getty Images for NASCAR)
"I know that Formula One is facing some profound economic challenges," Smith says, "because the teams are heavily reliant on major infusions of manufacturers' capital, at a time when the world-wide sales prognosis is for a significantly reduced level of vehicles.
"NASCAR's investments from manufacturers (Ford, General Motors, Toyota and Dodge) look incredibly outstanding, compared to Formula One. And that actually makes the barrier to entry in America (by F1 interests) even more formidable, because you can get the customer, for marketing, so much easier through NASCAR.
"But the good side of it is that it's great to see the entrepreneurial spirit is alive in America….
"And it's here, it's everywhere in this garage. And it's always been there for everyone who races.
"So I am glad to see somebody trying.
"Now whether it's a pipedream or a real dream or a nightmare, it's good to see the effort being made."
The F1 price point?
"It is my understanding that the manufacturers have from $100 million to $200 million invested in each organization, and the operation budgets are four to five times more than the richest Cup teams…and they only perform at half as many races as we do," Smith says.
"I consider it virtually impossible even to contemplate an effort like than unless you have at least nine figures of manufacturer's support behind you. And look, even Honda is leaving."
And Ford itself gave up on Formula One a few years back.
Economic issues are facing everyone in racing, Smith says: "When your sales volume shrinks, your margins shrink, and you're forced to shrink your costs, to go with the new business model.
"That's why you see General Motors having to shrink labor costs and reduce marketing expenses and convert bond holders to equity. To right-size the business.
"It is so challenging…very, very difficult. Because your costs don't want to shrink; in fact there is pressure to increase them.
Geoff Smith (L), as head of Jack Roush's racing operations, says if someone wants to back an American Formula One team, Roush is ready lead the charge into battle (Photo: Getty Images for NASCAR)
"So I can only imagine all the work Ford is doing…and our sponsors like DeWalt, which are having to make big adjustments to business because of changes in housing and construction.
"Literally all of our sponsors are having to make these downward adjustments.
"It is very, very difficult to change your way of doing business overnight."
And to go Formula One "You would have to have someone who is ready to say 'I'm ready right now to go world-wide, and put in $100 million a year to be in Brazil and Portugal and China and India….that it works for my business model,'" Smith says.
"Right now my brain is totally engaged in how we can do things to make this sport, and our opportunities in this sport, better. I'm not really thinking very much about companies that we can go market in Singapore. And it's just not very realistic to take a car that is only run in the United States and run it over there…."
Still, there is the new SpeedCar series, running with Formula One, racing NASCAR-type cars built in North Carolina….
But while, yes, expanding into the international marketing world has to be a card on the table, when and if possible, for all NASCAR teams, Smith is more concerned at the moment about the current NASCAR world.
And Smith says he is now very worried that Washington politicians might start meddling too much in America's classic capitalism:
"There are some pretty profound, fundamental issues that come out of this government intervention….which is scary.
"I want to point out that I think these politicians are totally absurd when they suggest that marketing is not necessary in America.
"And that is what they are saying, when they tell the banks that they are not allowed to entertain customers any more or be title sponsors any more.
"I look at Saturday's Nationwide event, and seeing Citi Financial winning it (with Greg Biffle in a Roush Ford), and I'm hoping that will help attract more customers to CitiBank, so CitiBank can pay off the government faster."
The Citigroup, one of the world's biggest banks, has just given the U.S. government a 36 percent equity stake in exchange for $25 billion in emergency aid.
"The government should be thanking us for winning this race for CitiBank, because that will help them get their money back," Smith says.
"So I am not upset over the fact that my taxpayer money is being used to help General Motors fund the personal endorsements of Jeff Gordon, Dale Earnhardt Jr. and Jimmie Johnson.
"At some level I should be offended by the fact that I am competing against them and I am also funding their lifestyles….which is still much better than mine.
"But I am not upset about that…because it is important for General Motors to continue marketing. They have to, to continue to survive. It is important for them, and for Ford, to make their NASCAR programs work.
"Marketing is essential…and it is capitalism.
"So every time a politician says he knows better about what ought to be in the marketing mix, to me that is a person who is saying 'We would prefer not to have capitalism in America, where companies are using all these marketing techniques so people can make informed choices.'
"They would want to eliminate that, because they would like to tell Americans what their choices are going to be, rather than let Americans decide for themselves."
F1 czar Bernie Ecclestone: Should he give Jack Roush a call? (Photo: Toyota Motorsports)
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Government meddling in the
Government meddling in the economy doesn't work? Of course it doesn't work - it was government meddling forcing banks to make bad loans that started the housing crunch; it is the market, unmolested by government, that is recovering the housing market. Sports marketing works as well.
What is galling is that politicians never learn - but then we have to share fault for electing crooked "community activists" from Chicago as President and career politicians to other elective offices.
While no one in the press
While no one in the press ever points it out, Smith and Roush virtually always have an agenda, and bias, when they comment. Formula 1 is one of the 2 biggest broadcast sports worldwide and 3 of the most successful auto manufacturers worldwide (Mercedes, BMW, and Toyota) have all re-affirmed their commitment to F1. It is obvious that Roush and many in the media have no understanding of F1 since Toyota has not overwhelmed everyone in NASCAR since it came in - but reports are that Roush's warnings about the Toyota threat did get him millions more from Ford. In the past 6 or 7 years it has been reported that Toyota has spent well over $2 billion in F1 and has yet to win a race - a fact overlooked when Roush and most of the press bemoaned the Toyota threat in 2007 and 2008.
too late for nascar and
too late for nascar and Jackie boy .Peter Windsor of speed channel and f1 fame has already beat them to it Windsor along with ken Anderson have already fielded the invite from Bernie Ecclestone ,no matter NASCAR will always dominate in the good ol' USA we like our racing simple,you know, turn left, then left again,then another left and so on.NAPSCAR,'cause you can really get some sleep while watching.open wheel Indy and f1 are the best races ,and except for the Indy 500 IRL should only race on road courses or gran prix tracks....
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