Full Throttle

This is a follow-up to a comment I left at the NASCAR Examiner. (Thanks for the kind email Greg- ed) Greg noted the recent C&D AF joke that got out of hand and what NASCAR could be like without factory support.

He correctly pointed out the few times in NASCAR’s history when factory support went the way of the steam engine, whether it was from fledgling union actions or walkouts over disputed rules, the end result was race teams found a way to race and compete.

I don’t see that changing today if worse comes to worse, and it just maybe coming to the worst possible scenario.

As we all know both GM and Chrysler have received multi-billion dollar infusions of cash from the Gubment. Part of those deals was the sacking of GM’s CEO and what amounted to a threat to Chrysler to merge with Fiat within 30 days.

With the merger edict having been issued on March 30th the swinging of a Sword of Damocles is getting close at hand.

And BTW, the day after it was “suggested” Chrysler merge, Fiat SpA’s credit rating was downgraded to ‘BB+/B’.

The assessment was based on “reported data as of Dec. 31, 2008, Fiat did not have enough available financial resources in the form of bank lines and existing cash to fully cover its financial maturities in the subsequent 12 months.”

That begs the question, and without naming names, what nitwit suggested this deal with both partners having very similar financial problems? It’s kinda like merging Ganassi and DEI, but worse, if you get my drift.

But I digress.

The latest merger death rattle comes from Fiat SpA’s CEO Sergio Marchionne.

Fiat would walk away from a tie-up with US carmaker Chrysler unless unions agreed to a new, lower wage deal, Sergio Marchionne, the chief executive of the Italian motor manufacturer, said.

In an interview with Canada’s Globe and Mail newspaper, Mr Marchionne said he would scrap the deal unless Chrysler unions agreed to match the lower costs of Japanese and German-owned plants in Canada and the US.

“Absolutely we are prepared to walk. There is no doubt in my mind,” Mr Marchionne said in comments published online. “We cannot commit to this organisation unless we see light at the end of the tunnel.”

That immediately brings up the question, so, UAW and associated unions, job or no job?

And a second one; With 15 days left before the deadline is this deal as dead as it seems or is there “light at the end of the tunnel?”

And a tertiary question; If Chrysler is toast which manufacturer will RPM and Penske switch to?

It’s a cinch it wouldn’t be the other financial lame duck GM (Unless this gets “NASCARafied” with a few sponsor decals), the only reasonable options are Ford and Toyota.

Ford would be the best option. To their credit - no pun intended - they positioned themselves long in advance of current conditions by securing lines of credit and other financial dealings to weather the current storm without going on the public dole.

On the other hand they have done some cost cutting within Ford Racing Division so the odds of them taking on any “orphaned” race teams are fairly slim.

The same could be said of Toyota, although I suspect they would dearly love to grab RPM and Penske as their own. Toyota faces the same challenges as the rest in addition to feeding the gigantic, albeit slimming, Formula One budget that dwarfs what they spend in NASCAR.

In the end, this post is more than a little pessimistic for Chrysler’s future, but I calls them as I sees them. Unless some miracle happens within the next 2 weeks the company founded in 1925 and withstood a financial tsunami in 1979 - thanks in part to a $1.5 billion Gobment bailout, may not see June 2009.