December 2, 2008
By Allen Madding
While the economic downturn affecting the entire country has played a large part in the downsizing and layoffs in NASCAR, the introduction of the Car of Tomorrow also contributed in the increase in expenses for the teams and the temporary need for additional employees.
Once the conversion to the new car was completed, the teams had additional employees it could no longer justify. That coupled with the shrinking dollars from the sponsors and complete withdrawal of many sponsors as companies nationwide reel in their expenses, teams competing in the NASCAR Sprint Cup Series, NASCAR Nationwide Series and NASCAR Craftsman Truck Series have been forced to make the hard decisions on how to trim their budgets.
Teams in all three series began to layoff employees, merge, and some even closed.
NASCAR has begun to take a close look at what they as a sanctioning body could do to help reduce costs for the teams. The first point of action NASCAR took was to ban testing completely from all tracks hosting races for any of NASCAR’s top three divisions. This move will reduce teams operating expenses while also putting a handful of employees at each race team out of work -- as many teams had assembled teams whose sole job was testing.
But how can NASCAR reduce cost for the NASCAR Nationwide Series?
The biggest cost saving measure NASCAR could implement for the number two series would be to postpone the introduction of the Car of Tomorrow for the Nationwide Series -- indefinitely. The cost involved in having to scrap a team’s entire inventory of cars and build all new ones was an extremely expensive proposition for the NASCAR Sprint Cup Series when the economy was still strong and the sponsor dollars were flowing a bit deeper.
Roush Fenway Racing president Geoff Smith has estimated that millions of dollars were invested building the 150 cars needed to replace their entire fleet within the 15 months given.
While no team in the Nationwide Series has 150 cars in their inventory, the cost to scrap all of their cars and rebuild is simply not an affordable option with the economy in the shape it is. The dollars required to make it happen are simply no longer available from the remaining sponsors.
When the Sprint Cup Series dumped all of their inventory of cars for the new Car of Tomorrow, the usual resale market for used Cup cars was flooded. Other series like ARCA and Hooters Cup simply did not have enough demand or money to consume the amount of cars the Cup teams needed to rid themselves.
If the NASCAR Nationwide teams are to follow suit as originally outlined by NASCAR, there is no one standing in the wings to purchase the current inventory of race cars. Being unable to sell off their current inventory of cars, the NASCAR Nationwide teams would have even more expense to assume, coupled with construction of the new Car of Tomorrow.
Dale Earnhardt, Jr. commented on the situation as he contemplated the introduction of the new car and its impact on JR Motorsports, "They're going to bring a (car of tomorrow) in and we won't be able to race in the Nationwide Series with the COT probably. That'll just be too expensive to switch all that over," he said.
If a big name like Dale Earnhardt, Jr. cannot muster the necessary sponsorship dollars to convert his NASCAR Nationwide Series team to the new car, how will the smaller teams raise the funds?
In the best interest of the sport and the teams that make up the NASCAR Nationwide Series, NASCAR needs to table the plans for the introduction of the NASCAR Nationwide Series Car of Tomorrow until the economy is in a much better place.
The thoughts and ideas expressed by this writer or any other writer on Insider Racing News, are not necessarily the views of the staff and/or management of IRN.
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