Chrysler's imminent demise - how will it affect NASCAR?

The following is an article by Peter M. De Lorenzo @ http://www.autoextremist.com/fumes1/

Snip...

"The writing is on the wall for Chrysler's racing programs despite the pronouncements to the contrary from management types at the company. I expect we'll hear the words (or something like them) "we're in it for the long haul," or "we plan on being a force in 2009," or "reports of our demise are greatly exaggerated" - right up until the day it's announced that Chrysler is sold, merged or parted out to one (or more) of its various suitors."

"The wave from the financial crisis enveloping our nation has only begun to hit the motorsports world, and we're just at the beginning of how this is going to impact big-time sports attractions - and NASCAR is probably the most vulnerable of all of them. Without sponsorship money, the whole NASCAR model will come unraveled. More teams will go under, and less sponsorship money will be available across the board for teams, drivers, individual races, promotional and advertising programs, etc., etc."

"But beyond the actual Dodge teams involved - I would assume the best of them would be absorbed by Toyota"

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Replies to This Discussion

Permalink Reply by Keith on October 15, 2008 at 2:00pm

Source?

If what you say is true, why is the local UAW at Jeep so uneasy?
They know something is brewing.

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Permalink Reply by Turtle7 on October 15, 2008 at 2:07pm

Follow the money for this deal.. Daimler just loaned a bunch of money to Cerberus and I think they still hold 20% of the Chrysler stock. Cerberus is also looking for the other 40 something percent of GMAC as they are majority owner. Could Cerberus be the conduit for Daimler to buy GM? If GM and Chrysler merge outside of the Daimler connection, what division, in a Gas short world, has the poorest mileage in the Chrysler stable? Is it Jeep?

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Permalink Reply by brian campbell on October 15, 2008 at 2:29pm

jeep would be my guess

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Permalink Reply by dawg on October 16, 2008 at 3:28pm

Yes, but only because they don't have Hummer! Now the cat is out of the bag. That's the real prize egg in the GM nest. Hummer, Dodge, & Robby Gordon, the Trifecta!

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Permalink Reply by Doug on October 15, 2008 at 2:30pm

My understanding of this deal was that Cerberus was looking to obtain the minority share GM still holds in GMAC in exchange for Cerberus' stake in Chrysler. Something along these lines anyway I'm sure it won't work out that picture perfect.

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Permalink Reply by WJM on October 15, 2008 at 3:14pm

Cerberus buy GM? Do your homework on private equity firms; it's not hard, just follow the trail of dead bodies. Here's just one problem of many that would make a buyout or merger unlikely: GM and Ford's postemployment (pension & health care) liabilities are underfunded by $94 billion, about $70 billion of that is GM's obligation. Cerberus wants to assume that liability?

Cerberus had no experience in the auto manufacturing business going in and the only thing they've learned since is that they want out. Cerberus didn't bring in enough "car guys" to help steer the ship. Bob Nardelli? Just a talking head. Ask Home Depot about the mess he left behind. He may be able to tell you how to remodel your bathroom but save your receipt because you'll be returning a bunch of shit you didn't need.

Cerberus buying a 51% stake in GMAC is no surprise. Stephen Feinberg, founder and CEO of Cerberus, is a former junk-bond dealer, excuse me, I mean "distressed-bond investment firm." Feinberg is well-skilled in the art of taking 50 pieces of worthless crap (bad loans), wrap it in pretty paper, spray it with cheap perfume and selling it as a bar of silver.

GM's best play would be to let Cerberus mercy kill Chrysler with a Chapter 11, take the prime cuts for pennies on the dollar, notably Jeep, and leave the rest on the side of the road.

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Permalink Reply by john mcglasson on October 15, 2008 at 4:38pm

If I've learned only one thing lately it's that these suits will lie to everyone on the planet until something actually happens. The UAW will watch factories close before they'll loosen up on those pensions, which is what's going to keep investors away. Bad decisions made over the last few decades are now bearing fruit. The US Auto Concern will make a fine car I'm sure. Welcome to the USSA.

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Permalink Reply by Lance on October 15, 2008 at 7:13pm

This guy has been singing the same tune for YEARS. He hates nascar and wants it to fail. I remember reading the exact same article by him on GM 4 years ago. I call BullSH&T.

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Permalink Reply by Lance on October 16, 2008 at 1:42pm

If this is the case, Nascar better hope this doesn't happen. This would kill every Dodge team out there not named Penske. I doubt highly that GM or Ford are going to want to invest more in additional teams. Toyota could pick up, possibly Penske but I don't see them getting Ganassi, Petty, or Robby's operation. We already know that GEM is probably in Toyota next year as well. If this does take place, then Nascar better be knocking on Honda's or Nissan's door.

It would be a shame to see the Charger, the new Challenger, and Viper just vanish. (won't shed a tear for the rest of Dodge's cars) Sign of the times I guess.