GM Budget Cuts Impact NASCAR

I expected to hear something about this all along, so it came as no surprise to me that bankrupt automaker, General Motors, would be cutting back on its support of NASCAR.  After all, when your losses are in the tens of billions of dollars you have to whack certain pet programs as you plant to do the same to some of your core brands.

Last week, GM brass met with Sprint Cup teams to review their commitment to them. Specifics of what GM had to say were left out, but word soon began circulating that the beleaguered automaker had announced a funding cutback. GM says that they are also planning to reduce funding for the Nationwide Series and Camping World Truck Series, meaning that some teams will have to rethink how they manage their businesses.

Johnny Benson Leaves Truck Series

This year has been a tough one for a lot of NASCAR teams, particularly those participating in the truck series. Sponsors have been pulling back or aren’t available to support the teams as strongly as they had in the past, making it difficult for some teams to field trucks. Red Horse Racing, which had been running a Toyota Tundra with 2008 truck series champion Johnny Benson at the wheel, ended up pulling truck #1 from the series due to lack of funding. A few days after that announcement Benson was seriously injured in a super-modified race held in Grand Rapids and is now recovering.

Chrysler is expected to cut back its support as well, having emerged from bankruptcy protection earlier this month and is now part of the Fiat Group. Ford, which has avoided federal government intervention so far has also cut back on funding, leaving Toyota as the only NASCAR manufacturer who hasn’t announced plans to trim NASCAR funding.

Other Manufacturers To Jump In?

As several manufacturers cut back on support, word has it that NASCAR is courting Nissan and Honda to gauge their interest in the sport. Honda currently supplies Indy Car with all of their engines, while Nissan has cut back on motor sports funding of late. However, given the chance to jump in, might both companies consider doing so? Yes, and perhaps Volkswagen and Hyundai would join them.

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Two Shifts To Produce The Chevy Cruze?

Earlier this month General Motors declared bankruptcy in a move that the company hopes will ultimately save the automaker. Right now, GM is busy making plans for its future which means that it is attempting to sell off Opel, Saab, Saturn and Hummer while closing down Pontiac.

When the company completes its short term restructuring later this summer, it should be able to emerge from bankruptcy in a better position to compete. One of the future models you hear mentioned often is the Chevy Volt, GM’s electric car, but it’ll be the Chevy Cruze which will bolster sales, perhaps quickly becoming the best selling GM product eventually.

In Continuous Operation Since 1966

GM has chosen its Lordstown Assembly plant to build the Cruze, a facility that has been in continuous operation since 1966. Last August GM selected the plant which turns out be a positive turn of events for the Ohio community where it is situated. Many GM communities are struggling with plant closures or seeing the writing on the wall: their own assembly or supply plants or distribution centers may not make the cut.

Lordstown will begin to produce the 2011 Chevrolet Cruze by next April or May which means that the cars will go on sale next summer.  Anticipated demand isn’t yet known, given the current state of the economy and GM’s own fortunes. If the Cruze were to hit the market right now, sales would probably be a disappointment. By Summer 2010, the economy should have improved to the point where demand would have rebounded perhaps causing GM to add a second shift at Lordstown.

Lordstown Has A Lot Going For It

Lordstown has benefits to it that other GM plants do not have, namely a new paint shop on site and a contiguous stamping plant. In addition, GM has poured hundreds of millions of dollars into the facility in recent years, a sign that even a damaged automaker intends to hold onto what works best.

The Cruze will be built at two plants in Asia and one in Europe. Lordstown will be the only plant building the Cruze for the forseeable future:

Source: Business Journal