June 01, 2009
This morning, the worst came to pass, as GM filed for bankruptcy protection in the fourth-largest filing in the nation's history. The onetime giant will receive a total of nearly $60 billion in financial assistance, and the federal government will take over a 72.5 percent share of the company in an effort to make it leaner and more viable.
What this means for NASCAR remains uncertain, but there will be definite, measurable impacts. Last July, GM announced it would not be renewing contracts at four of the 12 tracks where it has sponsorships. GM surrendered Bristol to Ford and Loudon to Toyota, and is now on a year-to-year arrangement with Daytona.
"I've got a lot of faith in GM, and especially Chevrolet. I've been with them for a long, long time. Our business is good, the products are good. And this economic downturn we've had has hurt everybody. It's hurt every manufacturer, Toyota and everybody else. But I think some people, maybe their pockets were deeper than others. But I feel like we're going to be good and we're going to be OK. They've got great products right now, so I'm hoping that if [bankruptcy] happens, that they'll get in and get out in a hurry and we'll just take it a day at a time."
GM is the second major NASCAR-affiliated automaker after Chrysler, which fields the Dodges driven by Kurt Busch and others, to declare bankruptcy. The other two automakers in NASCAR, Ford and Toyota, appear to be on more stable ground for the time being.
While GM's sponsorship investment in NASCAR has been estimated as high as $125 million, even if all that were to vanish -- a highly unlikely occurrence -- the sport would not wither and die. NASCAR sponsorships run so wide that other sponsors could step in to fill some of the slack, and other automakers would almost certainly be willing to make the marketing investment, given the intense loyalty of NASCAR consumers. But NASCAR is such an important marketing and consumer-relations outlet for GM that it's unlikely the automaker would end its involvement with the sport altogether; as the current advertising industry slogan goes, it would be the equivalent of trying to save money by not paying the electrical bill on the "Open" sign.
For now, most people affiliated with NASCAR agree that the human cost -- in terms of lives changed and careers evaporated -- is the primary concern. Sponsorship will be there, but the question for many is, who'll be on the other side of the table. And for the people who have spent years or decades in the service of GM, that's a sobering question indeed.
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