On July 15, General Motors unveiled yet another round of drastic budget cuts in its continuing efforts to keep the company solvent. Worldwide, the GM advertising and marketing budget will be cut one billion dollars. An interesting side note pointed out by Peter DeLorenzo of Autoextremist is that this action marked the first time ever that GM referenced motorsports in a public budget cutting announcement. Parenthetically, if you are not familiar with Autoextremist.com, it is an outstanding site that has information about the auto industry, racing, and the car hobby in general.
I believe there are now several factors that places the future of Corvette racing in serious doubt. First and foremost is the financial crisis at GM. In the July 15 announcement, among other reductions, it was stated that shareholder dividends would be suspended, salaried employee costs would be reduced by 20%, and truck capacity would be reduced 300,000 units by 2009. When the shareholders are no longer receiving $560 million annually, it is hard to conceive that motorsports won't be impacted. It is believed that the motor racing budget will be reduced 20% from current levels and Troy Clark, GM North America President stated, "There are some elements of motorsports that are a very effective means of promotion and communication with certain customer segments. The ones that are less will be scaled back."
Autoextremist believes GM is spending 120 – 140 million dollars in NASCAR alone. It is also estimated that the Corvette racing program is the cost equivalent to running one car in a top tier NASCAR team. Some of the NASCAR tracks have already been put on notice that sponsorships will be reduced or discontinued altogether. The contractual agreements with every NASCAR Chevy team are being reviewed. If you don't think Corvette racing is under close scrutiny, then you are in denial.
Brent Dewar was the VP of Advertising and Marketing for GM – North America. Today, he holds the same position for GM – Europe. There are factions within GM that for years have wanted to reallocate some of the NASCAR funding which is something that Dewar, a strong NASCAR advocate, generally resisted. Now that he has been reassigned, the wolves are at the door. As far as Corvette racing is concerned, Dewar's move to Europe could be a positive factor. In North America, Corvette sales represent about 1% of GM's total sales. Outside North America, Corvette sales are infinitesimal compared to total vehicle output. Clearly, the mission of Corvette racing is not so much as one of selling Corvettes as it is to build an image for GM in the worldwide arena. In that sense, Corvette racing is a catalyst which builds that image internationally. It is generally recognized that Dewar was a motorsports advocate during his tenure with GM – North America. Hopefully, it is realistic to take the leap of logic that in his new job in Europe, he will exert his influence to keep Corvette racing alive.
In the madness that is sports car racing in North America, there are three major factions. Grand American Road Racing is a NASCAR owned sanctioning body and features Daytona Prototypes as well as a GT series. Pontiac is involved with Grand Am with both DP and GT cars. The Sports Car Club of America promotes both amateur and professional racing but is geared towards regional amateur racing. Finally there is the American Le Mans Series which is the child of Don Panoz, whose interests include a long term lease of Sebring International Raceway, ownership of Road Atlanta and Mosport International Raceway. ALMS runs under the rules established for the storied 24 Hours of Le Mans race in France. Corvette participates in ALMS which is a venue that teams often use as a path to the French 24 Hour. In 2008, the 24 Hours of Le Mans was seen on television in close to 400 million homes in 117 countries. In Europe there were almost 20 million TV viewers. In ALMS in North America, and with the exception of occasional privateer entries, Corvette runs unopposed in the GT-1 class. BORING! It's estimated that Corvette racing allocates about one third of its budget to the 24 Hours of Le Mans and that connects the dots. ALMS gives Corvette (GM) exposure in North America but more importantly competing (and winning) at Le Mans pays off with global prestige. Corvette has recorded outstanding success at Le Mans, but when it fails to win as was the case in 2008, the critics are quick to point out that a race program that puts so many eggs in one basket is a risky proposition.
Uncertainty in rules for competing at Le Mans is another challenge facing Corvette racing. Le Mans racing has two separate bodies setting rules. The Automobile Club de l'Ouest (ACO) headquartered in France sets the rules for the top two prototype classes for Le Mans and ALMS. The Federation Internationale de l'Automobile (FIA) governs GT racing rules. Both ACO and FIA are in the process of making rules changes which will potentially have major impact on Le Mans and therefore ALMS racing.
The ACO was planning changes to become effective in 2010. This change would have combined the prototype classes and the GT-1 class where Corvette competes into a new top tier class known as Evo. The result would have been a closed cockpit car that would at least bear some resemblance to the production cars they represent. Current prototype competitors Audi and Peugeot vehemently objected and exactly where Evo stands right now is uncertain. Autoextremist insists it is on track, but others believe it is dead.
Corvette had a project underway to design a mid-engine car to compete in the Evo class. If Evo would be adopted and Corvette had moved forward with its car, it would have had GM's sports car competing at the top echelon of the Le Mans racers instead of one step down in the GT-1 class where it now competes. In May, GM announced it was halting development of an Evo car citing the uncertainty over impending rules changes. Officially the door is open to resuming development on the Evo Corvette if the rules picture clears. Realistically, an Evo Corvette is a victim of budget cuts and resumption in the foreseeable future is very doubtful. I'll take it a step further – it ain't gonna happen.
OK – Evo is out, but no problem – Corvette should just continue in GT-1 ---------- Not so fast ethanol breath! The FIA is combining the GT-1 and GT-2 classes into one. By doing so, it hopes to increase competition and encourage more privateer participation. If Corvette once had sights set on stepping up to the top class, the new rules will take it in the opposite direction. A class diluted by privateers will not have the recognition that a car competing for overall wins at Le Mans and ALMS races will have. If Corvette continues, the C6-R as we know it will be history and the replacement will be closer to a production car.
A positive note to all this is that Corvette's contract with Pratt and Miller Engineering, the company that runs the racing effort, runs through 2010. Does that mean that there will be a GM backed racing effort the next two years? One would hope so, but in a climate where costs are being radically cut, there have to be those in GM headquarters that are doing analysis of redirecting the Pratt and Miller effort, continuing the Corvette racing program, or evaluating the feasibility of buying out of the contract altogether. The coming months will be interesting.
A closing commentary not directly related to Corvette racing. Many of us will remember what happened to American muscle cars after the fuel scare of the early 1970's. Well folks, here we go again. We are rapidly sailing into a sea where high performance motors are fading. I know it is a generational thing, but I cannot see trading my 550+HP – 427 Grand Sport replica for a Honda Civic with coffee can exhaust. The bottom line is that if you want a high performance V-8, now is probably the time to fulfill that urge.
You cannot look like a genius coming out of a turn when you drove like an idiot going in to it.
Keep the shiny side up,
Richard Fleming
PS – In my July 10 email, I sent pictures of a Grand Sport coupe kit we had just received. In some cases, the pictures didn't come through. You can view them in this blog. The '76 "Bandit" Trans Am and the '81 Corvette are for sale. The '96 Grand Sport convertible and the C5 is not.
Posts
