Motorsports

Win on Sunday, layoffs on Monday

As American automakers continue to lose money and workers, they also see investing in racing as a valuable tool.

By BRANT JAMES
Published October 28, 2006

HAPEVILLE, Ga. - They rolled the last Taurus off the line Friday morning to pomp and pageantry, toasted its legacy and handed the keys to local businessman Truett Cathy. An institution as founder of Chick-fil-A, he got the final Ford car made at this other Atlanta institution. After almost a half-century, this gray monolith was spent, one of many victims of many problems within not only Ford, but the entire American automotive industry.

Thousands of workers were laid off by Detroit's Big Three of DaimlerChrysler, Ford and General Motors this year alone. Chrysler projected third-quarter losses of $1.5-billion. Ford, $1.3-billion in the first two quarters. GM, $115-million this quarter. Dozens of plant closings in the next few years.

Tough times.

Also Friday, just 20 miles south in rural Hampton, Ga., Fords, Chevrolets and Dodges began rolling off the back of gleaming haulers and into garage bays at Atlanta Motor Speedway in preparation for Sunday's Bass Pro Shops 500 Nextel Cup race.

Cash flow did not appear to be a problem here. Business was booming. The automotive industry's vigorous sporting identity at the track seemed insulated by far more than 20 miles from its consumer woes. But is it?

Though NASCAR teams craft much of their cars themselves, they depend on expensive engine blocks and heads and technical support from manufacturers. Peter DeLorenzo, an automotive industry consultant and publisher of autoextremist.com calculates each manufacturer's yearly investment in technology, subsidies and advertising at roughly $140-million. That's not enough to solve their big-picture problems, he said, but it's not money well-spent.

What if these bleak times prompt a rethink?

How do motorsports executives at the Big Three respond when a laid-off factory worker asks, "Why race?"

"When I got here 8 years ago, I asked, 'how do we measure this program?,"' said Dan Davis, Ford's director of racing technology. "They said 'win on Sunday, sell on Monday ... and everybody else does it. It's a test of manhood, testosterone.' I said, 'That's interesting, how do I go to upper management and tell them I'm spending their money wisely?"'

Davis hired a market research firm to answer that question. Though he would not discuss the amount put into or derived from racing, he said profits are "a pretty good figure," and is convinced that racing matters, specifically in NASCAR.

"If racing isn't paying the bill, let's get out," Davis said. "Racing has more effectiveness than almost anything else we're doing. When it comes to pure marketing, racing is the way we do it."

DeLorenzo disputes the approach, especially since Nextel Cup cars are virtually identical under "common template" rules.

"They seem to cling to this notion that NASCAR is really delivering for them in the showroom and I don't buy it," he said. "It's an image vehicle for them and they're afraid not to be there because of NASCAR's popularity."

DeLorenzo said NASCAR's explosion coinciding the past 10 years with Detroit's downturn proves that automakers have gotten little from the association recently.

"The way NASCAR is going, they don't need the manufacturers," he said. "If one of the manufacturers pulled out, one of the Detroit Three, NASCAR would say they really appreciated their involvement all these years and then, "next!"

J.D. Gibbs, president of Joe Gibbs Racing, said factory support remains crucial. A retreat, he said, would greatly diminish the sport.

"It would be a devastating effect to this sport," said Gibbs, whose General Motors-driving team has won three championships since 1992. "Would we still be out there racing? Yeah. Would it look like it does now? I don't think so. We're a pretty big company - 400 people - but when it comes to these (engine) blocks and these heads, there's stuff we can't do ourselves."

Long-time Ford employees remain loyal to the premise that millions spent in racing is worthwhile despite cuts and plant closings. From behind the desk of his wood-paneled office in UAW Local 882 in Hapeville, president S.L. "Big Steve" Stephens, 61, remains a staunch company man, though he may have to leave Atlanta and learn a new skill to stay with the company after 21 years.

"Henry Ford got started in a race car, and race cars promote our company," he said. "Is it worth it? Yes."

But for how long?

Brant James can be reached at brant@sptimes.com or (727) 893-8804. Times wires contributed to this report.

[Last modified October 28, 2006, 02:38:25]