Dodge teams sit and wait, but make plans behind closed doors

Nascar Insider

Dodge teams are waiting to see what will happen with their status for next season. Chrysler is negotiating with GM for a merger deal.

As of 10/27/2008, at 12:30 PM EST news surfaced... The U.S. Treasury Department is considering how to best provide financial assistance to facilitate a possible merger between General Motors Corp and Chrysler LLC.

The Treasury Department is considering aid of at least $5 billion, which could include direct capital injections and government purchases of auto loans, the source said, speaking on condition of anonymity. A decision on the government aid could come as early as this week.

Once the GM merger takes place, what will happen with the Dodge teams in Nascar?

GEM has a deal ready to go with Bill Davis Racing. This deal will allow GEM to add a 4th Cup team (AJ Almendinger rumored), but it would also pave the way for GEM to bolt from the hurting Dodge brand and move to Toyota. Nascar has stepped in and has put a hold on the deal until Dodge's future becomes certain. Nascar doesn't want Toyota to take over the once American auto manufacture racing series, in fear it could drive Ford & Chevy out.

It appears Petty Enterprise also has a plan and even a plan "B", if Dodge does pull out of Nascar, then Petty would take it's 2-car team and join DEI. DEI would keep the #1 (Truex) and #8 (Almirola) and drop the #15 and #01. They would add the #43 and likely transfer points from the #15 over to the #45. But, if Dodge sticks around, then Petty is likely to merge with another Dodge team, Ganassi Racing. It's rumored Target would then sponsor Bobby Labonte.

As for Penske Racing, they feel Dodge will be back next season even with a merger. A source close to the team says, "Dodge has continued to demand they will be back. They have alot of contracts, and a merger or buyout wouldn't let them out. So whoever buys them would have to honor them. We don't see any need to panic."

Robby Gordon is likely to stick with Penske, but who knows...Gordon switched from Ford to Dodge days before the season openning Daytona 500. Keeping up with his unpredictible status, the only one knows might be Gordon himself.

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Permalink Reply by Keith on October 27, 2008 at 9:12pm
The "merger" is nothing short of blackmail by CERBERUS. They want 100% of GMAC. To get it they raised the minimum credit score for consumer loans to 700 and severely tightened dealer credit on floor plans to put the squeeze on GM. GM does not want to relinquish their portion of GMAC much less acquire CHRYSLER. So they are resisting.

NASCAR is acting like they have their head in the sand as usual.
Permalink Reply by Doug on October 27, 2008 at 10:49pm
Hey somebody else is feelin what I've been saying about this. Nothing with will be settled until someone "blinks" between Cerberus and GM.
Permalink Reply by Lance on October 27, 2008 at 11:00pm
nothing Nascar can do about really.
Permalink Reply by JoCo on October 27, 2008 at 9:30pm
Very astute Keith...I hadn't thought of it from that perspective before. And it makes complete sense too, given that Toyota is running 0% financing on a slew of models and a normally responsive GM has done nothing to counter that
Permalink Reply by WJM on October 28, 2008 at 11:55am
In Greek mythology, Cerberus is the three-headed watchdog who guards the entrance to the lower world, the Hades. Hades is the lord of the dead and ruler of the nether world. Stephen Feinberg, the founder and CEO of Cerberus made his mark as a junk bond artist; the lord of worthless paper. Is it no wonder that he wants GM's remaining stake in GMAC?

What has slid through cracks is the demise of Residential Capital, the parent company of GMAC Mortgage, also majority owned by Cerberus. ResCap layed off 5,000 employees last month and plans to close all 200 GMAC Mortgage offices.

We call Chrysler an automaker, but it's really a $19 billion liability that happens to make cars. That liability is the estimated cost of health care benefits for employees and retirees, promises made years ago that the company can no longer keep and still compete in the global auto business. The best hope for Chrysler and its workers would be a Renault-Nissan merger, but it appears that deal is off the table. A GM-Chrysler merge combining two beaten and bloody entities slumped against the ropes will be a disaster for tens of thousands of workers.

Perhaps the thinking is that a GM-Chrysler conglomerate will be so big that it will not allowed to fail; much like the recent bailout of AIG and Goldman-Sachs.
Permalink Reply by SrMumz on October 28, 2008 at 12:39pm
I happened to drive by our County Airport (Dutchess) yesterday and what were sitting on the tarmac, but two jets.......one from Petty and another from DEI. What in the world they were doing in this neck of the woods is beyond me??? Most likely they were hunting at the Pawling Mountain Club or Clove Valley Rod and Gun....both of which have about a six figure annual membership fee.
Permalink Reply by Joan Forsythe on October 28, 2008 at 1:20pm
With GM selling Hummer to Russia and these latest news briefs - it doesn't look like GM will be in business much longer. I hate the idea of Chrysler and GM merging, Dodge and Chryster have a lousy product - always have. Joan
Permalink Reply by Rod on October 28, 2008 at 1:30pm
The downfall of these companies comes directly from the UAW. This union and it's members have made it impossible for American car companies to compete. The wage and benefits packages demanded by the union members have killed the car companies. They have fought and won these contracts year after year with no regard for the long term stability of these companies. I don't know about you guys but I can't see spending 50k on a junk product just so some assembly line worker gets his 80k salary.
Permalink Reply by Doug on October 28, 2008 at 1:43pm
As a union employee (not UAW) I hate to say it but you are right. The UAW has gotten way to greedy and are only just now beginning to pay for it. How can an automaker possibly make any money when they sign agreements that make them pay employees that are laid off 80-85% of what they make for up to 2 years. It's impossible. Now you see Honda and Toyota plants popping up and being successful and paying employees decent wages and benefits without the unions and doing just fine as a company. While I think unions are very good and i support fellow union employees, I cannot in this instance as ultimately the union has failed the employees by inevitably costing them their jobs.
Permalink Reply by Rod on October 28, 2008 at 3:39pm
I have worked in unions before and they do have a place in the workforce, but UAW has always thought of the big 3 as their own entitlement programs. I am all for somebody making more money, just not at the expense of the company. That is why these companies are in this mess. Do you see the UAW members coming out saying they would be willing to take salary and benifit cuts? No so in turn they will now all be unemployed and left to feed off the public trough, which I am getting damn sick of filling back up. Something needs to give before the few of us with jobs are asked to support everyone else!
Permalink Reply by Sarah on October 28, 2008 at 3:00pm
GMAC Wants to be Part of Federal Rescue Program

WASHINGTON -- GMAC Financial Services wants to be part of the federal government's $700 billion rescue of the nation's financial system, the company said today. "GMAC has been in discussions with the government on a multidimensional level," said GMAC spokeswoman Toni Simonetti. "We are interested in exploring options that are available to us through the federal government's tool kit that was implemented under the new legislation."
Source: Automotive News (Subscription required.) 10-28-08
Permalink Reply by Sarah on October 28, 2008 at 3:04pm

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