Steven Cole on May 11, 2009 2:38:43 PM
Much has been made of the extent to which Chrysler and General Motors' financial problems might impact their NASCAR participation. With Chrysler filing for bankruptcy, and General Motors expected to follow suit within the next 10 days, there is cause for concern.
Dodge executives have said all the right things regarding the company’s participation in NASCAR -- that, despite the bankruptcy, no changes were planned.
Now, there is evidence that it may be beyond their control. According to Automotive News, Chrysler wanted to spend $134 million in advertising over the nine weeks it is expected to be in bankruptcy, but the U.S. Treasury's auto industry task force gave it half that.
“So if General Motors, which is wrestling with the possibility of a Chapter 11 filing itself, is wondering how much influence the task force will have over marketing, the answer is plenty,” the publication said. “Transcripts from the U.S. Bankruptcy Court for the Southern District of New York, which is hearing the Chrysler case, showed that the task force at least understands that advertising is a necessary expense -- even if it doesn't think Chrysler needs $134 million for nine weeks of car ads.”
Meaning what? Meaning that, under bankruptcy -- and remaining in business primarily using government money -- the government is not hesitating to tell the manufacturers how much money they can spend on marketing, which is where the lion's share of motorsports funding comes from. Very little -- less than ever -- comes from research and development.
In the government is willing to cut Chrysler's marketing allocation in half -- and that's half of what Chrysler was asking for, not half of what it is used to spending -- then it may be a tough sell to convince the feds that taxpayer dollars should go towards supporting Dodge, which has won just one race this year, Kurt Busch's victory at Atlanta.