NASCAR in Crisis

Updated: 2009

In this section, we will be taking a look how the economic crisis has affected NASCAR. Below does not include the stories about team mergers, only cost cuts and layoffs..

ISC, Speedway Motorsports, GM, Ford and Toyota stock symbols:

Humpy Wheeler – NCMA Initiate “Motorsports Employment Task Force”

The motorsports industry is not immune to the current economic downturn. Nearly all race teams in the industry have made some level of cutbacks. It is estimated that upwards of 700 jobs have been lost in recent weeks and its possible the lay-offs will continue into 2009. Initiated by Humpy Wheeler and administered by the North Carolina Motorsports Association a Motorsports Employment Task Force was developed to address the job loss issues. A meeting was convened last Friday.

Attendees of the initial meeting included associates from NASCAR, the NC Legislature, Centralina Workforce Development Board, Career Transition Consultants, NC Biotech Center, NASCAR Technical Institute, Women’s Auxiliary of Motorsports, NC-Community College Motorsports Consortium, Belmont Abbey College, Compass Career Management, The Wheeler Company and The NCMA.

The group discussed ways to immediately provide support and information to current displaced workers. In addition the Task Force discussed plans for a promotional campaign to other industries that would showcase the skills and benefits to hiring someone from the Motorsports Industry. (More at North Carolina Motorsports Association)

Text of a letter sent by NASCAR chairman Brain France to Congressional leaders in support of the U.S. auto manufacturers:

I am writing you as a concerned American who wants what is best for our great country. Of course, the domestic automobile manufacturers play a very important part of the heritage of NASCAR, but more importantly, it is vital for all of America. The U.S. auto industry has long been the backbone of our nation’s manufacturing sector. This industry isn’t confined to “Detroit” or even the Midwest. It’s everywhere in America. And its current troubles are putting our country’s overall economic health at stake. The collapse of the U.S.-based auto industry – a grim possibility amid the current economic and credit crises – would have an impact far beyond nearly 355,000 Americans directly employed by the Big Three. The livelihood or one in ten people in America is related to the U.S. auto industry.

The economic ripple effects of a collapse of our auto industry would be devastating:

Nearly 3 million jobs would be lost in the first year alone – with another 2.5 million to follow over the next two years.

Personal income in the United States would drop by more than $150 billion in the first year.

The cost to local, state and federal governments in lost taxes, unemployment and health care assistance could reach more than $150 billion over three years.

Domestic automobile production would more than likely fall to zero -- even by international producers, due to supplier bankruptcies.

For these manufacturers to survive, your assistance is urgently needed. By immediately supporting America’s automobile industry, you can help our nation avoid a devastating economic blow.

We urge the Administration and Congress to support a bridge loan package under deliberation. As unattractive as the idea of corporate federal bailouts can be to many Americans, including me, there appears to be no alternative. Federal aid is in the best interest of the entire country.

Best regards,

Brian France

Thursday, February 5, 2009

Roush defends NASCAR in slowing economy: Jack Roush, co-owner of the NASCAR team Roush Fenway Racing, contended that "the disappointing ticket sales and souvenir sales are an indicator of the health of the world's economy and not the referendum on the popularity of NASCAR." Instead, auto racing "has some economic challenges that are not unique to businesses around the world," he said. (LA Times)

Monday, January 26, 2009

NASCAR's sponsors making large cuts: The grim economic news isn't just affecting NASCAR's teams as they prepare for next month's season openers at Daytona International Speedway. Four of NASCAR's largest corporate sponsors -- including Sprint Nextel Corp. -- announced major layoffs and cutbacks Monday as a result of the worldwide economic slowdown. In an effort to reduce labor costs by more than $1 billion, Sprint Nextel officials announced the company will eliminate 8,000 jobs -- or 14 percent of its workforce -- by the end of the March, placing a freeze on salary increases and suspending its 401(k) match for the year. The nation's third-largest wireless phone carrier posted a net loss of $326 million in the third quarter of 2008 and nearly $1.2 billion for the first three quarters of 2008. (More at NASCAR.com)

Wednesday, January 21, 2009

More layoffs at EGR: Earnhardt Ganassi Racing laid off another 30 employees on Tuesday, bringing the total to more than 150 since the 2008 season ended. (ESPN.com)

Thursday, January 15, 2009

Toyota to cutback motorsports budget: The president of Toyota Racing Development said Wednesday he expects budget cuts in its NASCAR program as the Japanese automaker feels the effects of the global economic crisis. Typically immune from the declining sales that have rocked Detroit's Big Three automakers, Toyota recently said it anticipates its first yearly operating loss in 70 years for the fiscal year ending March 2009. The losses will have a ripple effect on Toyota's racing program, TRD president Lee White predicted. "There is probably not anything on this earth here that Toyota is involved with now that is not under some level of review regarding budget expenditure," White said in a national conference call. "That includes everything that we do, everything that TRD does and everything we do around motorsports. There is a review of everything. Certainly if contracts have expired, it's very likely that contracts have not been renewed, or if they are being renewed, they are certainly being renegotiated." (ESPN.com)

Saturday, January 10, 2009

Daytona, Auto Club Speedways slash ticket prices: Daytona International Speedway and Auto Club Speedway in Fontana are among several NASCAR tracks planning selected ticket price cuts or other promotions in the face of the poor economy. Daytona International, home of the season-opening Daytona 500 on Feb. 15, said Friday it slashed the price of "a limited number" of seats -- to $55 each from $99 -- in its 58,000-seat grandstands along the 2.5-mile track's back straightaway. Auto Club Speedway, which hosts the following Cup race Feb. 22, cut prices in the first five rows of its main grandstands to $35 a seat from $55. (LA Times)

Thursday, January 1, 2009

Race Scan Communcations files Chapter 7 bankruptcy: Race Scan Communications, filed for bankruptcy Dec. 18. Todd Malone and his company, which Malone shuttered Oct. 22, are seeking Chapter 7 protection, commonly referred to as a liquidation bankruptcy. In his petition, Malone reports having $118,870 in non-exempt assets, about half of which is Race Scan’s store inventory, and $616,000 worth of unsecured debts. “I just had no choice,” Malone said Monday. “I really didn’t want to go through this, it’s an experience that I never hope to go through again.” (Bristol Herald Courier)

Sunday, December 7, 2008

Brian France sends letter to congress to ask for help for US Automakers: NASCAR chairman Brian France has lobbied Congress to support a financial rescue plan for the struggling Big Three automakers. Chrysler, Ford and General Motors — three of the four manufacturers that participate in NASCAR — are pleading with Congress for a bailout to prevent their companies from going bankrupt. "I'm writing you as a concerned American who wants what is best for our general country," France wrote. "Of course, the domestic automobile manufacturers play a very important part of the heritage of NASCAR, but more importantly, it is vital for all of America." The letter, a copy of which was obtained Saturday by The Associated Press, was addressed to Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell, Sen. Chris Dodd, chairman of the Senate Banking, Housing and Urban Affairs Committee, and Sen. Richard Shelby, the senior Republican on the Banking Committee. It was dated Tuesday. France's letter warned that if the auto industry fails, 3 million people would lose their jobs in the first year, and another 2.5 million over the following two years.

Thursday, December 11, 2008

Helton: No plans to shorten race weekends: NASCAR President Mike Helton asked if there will be any consideration in shortening the racing weekend to save more money? "Not today. Except to tell you that starting next week, we, NASCAR have the opportunity to sit down and catch up on topics that will be timely for '09. And in reviewing that we will have things over the off season and maybe into January where we can come back and say these are things that we're doing in different series or all the series. Hopefully, there are other things we can accomplish and put forward to address the issues and the future of the sport. But, in the meantime, we have to protect the quality of what goes on on the racetrack because at the end of the day, you don't want to cut into the muscle. You have to whatever your decision is whether it's your own media outlet, or your own household or whatever business you might be in, whatever stake you've got to watch after, it's important to make forward thinking and good decisions. But it's also important to not lose sight of the fact that things are different." (Augusta Chronicle)

Tuesday, December 9, 2008

Jeff Gordon willing to take salary cut: On Monday, Jeff Gordon, four-time Cup champion, told the Sporting News wire service he is willing to take a salary cut -- Forbes magazine lists his annual income, including endorsements, at $32 million -- if it would help his team, Hendrick Motorsports, through the economic crisis. "It's no laughing matter," said Gordon, driver of the No. 24 DuPont Chevrolet. "It's tough times. It's something to be very serious about. ... I'll do whatever it takes for us to have the best team we can possibly have. If that means take part of my salary to keep certain people on or hire certain people, I'll do it." Gordon added that luxuries that go with being a racing star probably no longer are warranted. "It's stupid what we spend on motor homes and planes and all this," he said. "Do we need that? No." (ThatsRacin)

More layoffs at Petty; GEM and Petty merger? Petty Enterprises released 39 employees on Monday, bringing the total to 65 since the end of the season. A source close to the situation said Petty Enterprises has about 54 employees anxiously waiting to hear whether there will be a merger with Gillett-Evernham Motorsports. "Everybody is still looking for marching orders in what direction we're going in," the source said. The Pettys have been in negotiations to merge with several teams for months. Two were eliminated when Dale Earnhardt Inc. and Chip Ganassi Racing with Felix Sabates merged last month. The possible merger with GEM would have the famous #43 joining the #9 (Kasey Kahne), #19 (Elliott Sadler) and #10 (Reed Sorenson) of GEM to become a four-car operation. Whether 2000 Cup champion Bobby Labonte, the current driver of the unsponsored #43, would be a part of that deal remains unclear. Labonte, who signed a long-term deal that included partial ownership with Petty Enterprises earlier this year, has reportedly had talks with DEI-Ganassi about driving the Target-sponsored #41. That could clear the way for AJ Allmendinger, released by Red Bull Racing late this season, to move into the #43. Officials at Petty Enterprises and GEM were not available for comment. (ESPN.com)

Saturday, December 6, 2008

Wood Brothers to attempt only 12 Cup races in 2009: The legendary #21-Wood Brothers organization will run only 12 Sprint Cup races next season. Eddie Wood, co-owner of Wood Brothers Racing, said tough economic times have forced the organization to enter only the season-opening Daytona 500 and mile-and-a-half tracks with Bill Elliott, the 1985 Cup champion. The mile-and-a-half tracks were picked because Ford's program is strongest there. "We could run up to 20 but we decided to do 12 and do it right," Wood said Saturday. "We're going back to doing it the way we did it years ago." The organization used to pick and choose races in the early years. It ran only 18 races in 1973, with David Pearson, who won 11 of them. Wood said the organization, which lost Air Force as a sponsor to Gillett Evernham Motorsports, had to let 22 employees go to reduce the team to about 40. (ESPN.com)

Developers of Hard Rock Hotel and Casino at Kansas Speedway withdraw application: Only hours before the project was set to receive final approval Friday from the Kansas Racing and Gaming Commission, casino partners International Speedway Corp. and the Baltimore-based Cordish Co. said it had become “prudent and necessary” to withdraw their application. The deal called for them to build and manage a state-owned casino complex that had been estimated at $705 million. The Hard Rock partnership, Kansas Entertainment LLC, said it remained interested in building a casino at the speedway in Kansas City, Kan., but not as originally proposed. It intends to submit a new application for a phased project after the state, as expected, restarts the selection process and reopens bidding. “It is absolutely our intention to reapply for a license in the northeast zone,” said Kansas Entertainment President Joe Weinberg. “We have a lot of emotion and energy invested in this project.” (KC Star)

Tuesday, November 25, 2008

FOX, ESPN look to cut production cost: Fox was expected to meet with NASCAR this past week and ESPN in the coming weeks to explore potential cost cuts on the production side. Also, about 20 members of Fox’s sales and marketing team will meet at NASCAR’s New York office to talk about unique approaches that might distinguish the sport from other properties. “It’s really going to be a half-day seminar on how we can think differently, approach the market differently and provide different opportunities for advertisers,” said Paul Brooks, president of the NASCAR Media Group, from the NASCAR hauler during last week’s season finale at Homestead-Miami Speedway. “What are we missing? What can we do better? We want to make sure we’re looking through all of those opportunities.”On the production side, Brooks said the sanctioning body will work with Fox to find savings as long as the viewers won’t notice a difference.“There are additional things we can look at as far as sharing and managing facilities in an even more efficient way,” Brooks said. (Sports Business Journal)

Friday, November 21, 2008

Few layoffs at Roush Fenway Racing: Jack (Roush) said he would have to "displace" half a dozen employees involved with his test program as a result of NASCAR banning testing at its sanctioned tracks in 2009. But his core staff -- those involved with his Sprint Cup and Nationwide team operations at his race shop in Concord, N.C. -- "will remain intact," he said.(Detroit Free Press)

Wednesday, November 19, 2008

Latest in NASCAR layoffs: Petty Enterprises, The Wood Brothers, Bill Davis Racing and Ernie Elliott's engine shop all reduced their staffs in the two days since Sunday's season finale. Although exact numbers are hard to pin down, Petty chief marketing officer Mike Bartelli said the company released 30 employees. The Wood Brothers are believed to have let go more than 20 employees. BDR, which has no sponsorship lined up for its Sprint Cup program, has cut its staff to all but a handful of employees. (AP)

Tuesday, November 18, 2008

Hall of Fame Racing to layoff employees: Hall of Fame Racing, the NASCAR team owned by Arizona Diamondbacks executives, will cut its staff even if it secures sponsorship to run a full 2009 season. HoF general manager Tyler Epp said Tuesday employees were told no one will be laid off before the end of November, as team officials search for more funding. But with 44 employees for a single-car operation, Epp said the team is overstaffed. "The reality is we ran 39th in points this year and personnel changes are going to be made," Epp said. "And we simply have too many people for a one-car team. We're going to have a reduction no matter what happens." (AP/ESPN.com)

Wood Brothers laysoff employees: Lee Spencer is reporting.. Due to current economic conditions, Wood Brothers Racing has downsized its Sprint Cup and Craftsman Truck Series operations effective immediately. The Wood Brothers expect to continue the 58-year tradition of the No. 21 Ford when racing resumes in February. "This economic downturn has been tough on everyone and racing is not immune," team owner Eddie Wood said. (FOXSports.com)

Monday, November 17, 2008

Owners show support for Detroit's Big Three: "The Big Three are the backbone of our country," Rick Hendrick said in a news release sent out by Chevrolet. "With nearly 7,000 people working at Hendrick Motorsports and Hendrick Automotive Group alone, I see their impact firsthand. The manufacturers play an irreplaceable role in the global economy and support millions of Main Street, American jobs. I feel a responsibility to those people and their families, and our leaders in Washington should, too.” Richard Childress, owner of Richard Childress Racing, expressed similar concerns and said NASCAR wouldn't be where it is today without involvement from Chevrolet, Dodge and Ford. "The Big Three have also played an important role in NASCAR for decades," Childress said. "I can’t imagine racing anything but Chevrolets," Childress said. (More at SceneDaily.com)

Sunday, November 16, 2008

NASCAR testing ban to save millions: In a cost-cutting initiative reflective of the nation's economic climate, NASCAR officials yesterday announced a ban on testing that is expected to provide a savings of a reported $30 million-$40 million. Effective Jan. 1, NASCAR will no longer permit testing by its teams at sanctioned tracks that stage Sprint Cup, Nationwide, and Camping World Truck Series races, as well as Camping World East and West events. While NASCAR has been perceived as a prosperous sport that enjoyed unbridled growth over the last two decades, it was not immune to the economic concerns of its teams, sponsors, and manufacturers. "I think this decision is symbolic of NASCAR working with the industry," said NASCAR president Mike Helton. (Boston Globe)

Friday, November 14, 2008

NASCAR to ban all testing in 2009: In an effort to help teams manage costs, NASCAR is suspending testing for its three national and two regional racing series for the 2009 season. Testing for the NASCAR Sprint Cup Series, the NASCAR Nationwide Series, the NASCAR Camping World Truck Series, as well as the NASCAR Camping World East and West Regional Touring Series at tracks hosting any of those events are included in the 2009 policy. NASCAR reached this decision following several months of discussion with the teams regarding testing, coupled with the current economic conditions. The suspension of testing should save the industry millions of dollars. "This is a significant move during an unusual time for all of us," said NASCAR President Mike Helton in making the announcement. “NASCAR has routinely adjusted its test policy over the years to reflect current conditions. This is another example of that.”(NASCAR PR)

Layoffs at Bill Davis Racing: Heading into the final race of the 2008 Sprint Cup season, Bill Davis Racing (BDR) is fully committed to preparing to participate in a full season of competition in Sprint Cup racing in 2009. The search for sponsorship for the BDR Cup program is ongoing. Though, like many of its competitors, the team has been forced to make cutbacks at the High Point, N.C.-based shop in recent weeks, Crew Chief and Competition Director Tommy Baldwin will have a full staff working during the winter months preparing for the start of the 2009 season. “We have a busy winter ahead of us,” states Baldwin. “We have windtunnel and 7 post time scheduled and as much track testing as we can get in before the first of the year due to the new testing policy NASCAR just announced. No doubt these are tough economic times and we’ve had to make adjustments to our work force like every other team out there, but it’s still full steam ahead for our Bill Davis Racing Cup team. I know everyone is working hard to make sure we show up in Daytona with everything we need and I’m confident we’re on our way to getting all the pieces put into place to make our program even stronger in the future.”(BDR PR)

Tuesday, November 11, 2008

FRANCE: No bailout for NASCAR teams: Brian France said Sunday that while NASCAR is doing what it can to help teams navigate troubled economic waters, there's no guarantee that some won't go under. "Some of the team owners are in dire straits, we understand that," France said. But, he said, " ... we can't expect to operate as an island and be oblivious to what???s going on. The idea that we can have a safety net for everybody in our industry - you would hope that you could, but it's not realistic." France, NASCAR's chairman and chief executive officer, said the structure of stock-car racing as a industry makes it harder to do something akin to what the National Football League has done in securing a $2 billion line of credit for its teams. (Charlotte Observer)

Monday, November 10, 2008

Development slowed near NASCAR Hall of Fame: In a sign of the faltering economy, two developers have pulled out of land deals that city officials hoped would help pay for the NASCAR Hall of Fame. City staff members say the broken contracts will not hurt the NASCAR hall, however, because of safeguards that ensure it has secure funding and is built on time. They also believe that when the real estate market gets better, the city will have no trouble selling the land. The land deals were on two parcels that will become available once a redesign of the Interstate 277 interchange at South Caldwell Street is complete next year. The city plans to sell a total of five such parcels – about 12 acres – and estimates it will pull in about $60 million from the sales. Some of the money will pay for the road construction, and $20 million is committed to the NASCAR hall.(Charlotte Observer)

Sunday, November 9, 2008:

NASCAR facing layoffs: There's talk of layoffs -- hundreds of them -- once the current NASCAR season ends. Hendrick Motorsports and Dale Earnhardt Jr.'s team, JR Motorsports, have already cut staff. Depending on how you count it, as many as 15 current full-time Cup teams face questions about their sponsorship for 2009. You can multiply that number by two or three if you include the Nationwide and Truck series. (Charlotte Observer)

GM looks to continue NASCAR support: A GM official told scenedaily.com that the company would be able to honor its contractural obligations to NASCAR teams in 2009. But GM has already made cuts in its marketing plans and teams clearly can’t expect the manufacturer to add a lot of things to what it is absolutely committed to provide. GM has called off any talks of merging with Chrysler and its racing officials have nixed any NASCAR mergers that would involve associations with teams running another manufacturer’s product. (Charlotte Observer)