The Hot Pass: GM budget cuts to affect garage

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Lee Spencer

Lee Spencer is the Senior NASCAR Writer for FOXSports.com. She has provided award-winning coverage of auto racing over the last 15 years. Spencer has lent her expertise to both television and radio and is a regular contributor to SiriusXM Radio and the Performance Racing Network. Follow her on Twitter.


SONOMA, Calif.

For the fans who were appalled when Kyle Busch smashed a $2,000 Gibson Les Paul guitar at Nashville Speedway, are you any more incensed by a driver executing a burnout that blows up a $100,000 engine? Given the changes to the operating budgets of some of NASCAR's top teams, is it any surprise that drivers might now ask permission to destroy a six-figure power plant if that money could be used to hire another guy in the shop?
If there was ever a time for teams to scrutinize every dollar spent on racing, that time is now. On Tuesday and Wednesday, General Motors met with Sprint Cup Series teams to discuss its level of commitment for the foreseeable future as part of the company's reorganization under Chapter 11. Ed Peper, GM North American vice president for Chevrolet, along with Director of GM Racing Mark Kent and Manager of Chevy Racing Terry Dolan made the trip from Detroit to Charlotte, N.C. But no one is talking specifics. Rick Hendrick, a GM distributor who is considered to have the flagship organization of Chevrolet Racing called the conversations productive. GM is still "committed to racing" and HMS but needs to make corrections. And Hendrick is willing to help. Tony Stewart, who has received assistance and support for both NASCAR and World of Outlaws teams, echoed a similar sentiment. Ditto Earnhardt Ganassi Racing president Steve Lauletta. After celebrating 40 years under the Chevrolet banner, Richard Childress toed the party line promoting the product, the improved fuel mileage of new vehicles and the belief that GM "will be a stronger company when they come out of (bankruptcy protection)." Childress would not discuss details: Whether he received his most recent support check from GM, or whether the supply of parts or pieces would cease for Richard Childress Racing or Earnhardt Childress Racing Technologies — the engine development side of the business — in the near future. However, he did admit that RCR would "have to make cuts like everybody else," a move that Childress for the most part had been able to avoid before now with the addition of the fourth team. He also made it clear that the latest developments would not affect performance or technology. Every contract between manufacturers and teams is different. The support given to an organization can include everything from cash to sponsorship to engines to parts and pieces to research and development. In the height of the sport, the investment from a manufacturer to a team could have been as high as 90 percent of a team's budget. But with recent corrections those figures are likely 10 to 20 percent. Before the year started, GM's initial cuts amounted to approximately 20 to 25 percent of its usual support, according to team sources. This latest cost saving measure is rumored to be an additional 20 percent from factory support. So what do these cuts mean? Of the teams' current operating budgets, here's a look at what will be cut first:
  • Personnel — There have been sizable reductions in manpower in the last year. For most organizations, people account for 50 percent of the costs. Not only have positions been eliminated, remaining employees have been asked to take cuts to pay and benefits packages. Expect additional reductions in the coming weeks.
  • Travel — Even in the absence of testing, travel accounts for a tremendous amount of expense. Including the cost of airplanes, the trek from track to track can be quite expensive. This year teams have opted to drive from Charlotte to tracks in close proximity such as Richmond, Atlanta and Talladega when in the past owners would not have thought twice of firing up the company jet. Crewmen have also been forced to double up when it comes to lodging. Anyone that has been to an event knows the ridiculous rates that hotels gouge customers during a race weekend.
  • The last area to take a hit in the budget will be technology — Most owners don't mind that 10 to 20 percent of their budgets are spent on engines, as long as the result is speed. Performance is the key factor in attracting investors and offering a return on investment. And in the increasing absence of factory support the role of sponsors will be more elevated than ever.

    Numbers game

    In five full years on the NASCAR Sprint Cup tour, Brian Vickers had amassed just five poles entering this season. But in the last two races, Vickers has doubled this year's pole count to four.
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    Vickers, whose best finish at the the 1.99-mile course is 14th (2006 and 2008), ran a lap of 93.678 mph to knock Kyle Busch off P-1 for the second consecutive week. Ironically, Vickers' Red Bull teammate and former Formula One racer Scott Speed missed the show for the second time this season. However, the Manteca, Calif.-native, will be racing in front of his area fans after agreeing to a deal to replace Joe Nemechek in his ride. Boris Said was the only road course specialist to break into a top 10 with a lap of 77.084 mph. Said was also the top qualifying Ford.

    Say what?

    Hershel McGriff, 81, failed to qualify the No. 4 Chevrolet for Saturday's Bennett Lane Winery 200 Camping World West Series race at Sonoma. When Kyle Busch was asked his opinion of an octogenarian competing in the West race, the 24-year-old replied, "I remember watching him in a few races when I was younger at Vegas. He was old then."

    Overheard in the garage

    In Richmond, Tony Stewart insisted there was no room at the inn — or Stewart Haas Racing — for a third team. On Friday he sang a different tune. "It's a possibility," Stewart admitted. Stewart promised teammate Ryan Newman and his management team that SHR wouldn't "try to grow too fast too soon." "We wanted to make sure we had two cars that were competitive each week and had a shot to win the championship," Stewart said. "I'm proud of the fact that we're at that point." But given where the team stands right now, adding a third team isn't unrealistic. The driver/owner is currently the point leader while Newman is fifth in the point standings. Stewart said five or six weeks ago the thought would not have crossed his mind but with the right driver and sponsorship opportunity he'd have to consider the option. Certainly, Brad Keselowski could find a home with SHR until there was room at Hendrick Motorsports in 2011. Two names also mentioned for rides in the Hendrick fold beyond 2010 are Kasey Kahne and Kevin Harvick. Both drivers' contracts expire at the end of next season.
  • Tagged: Kyle Busch

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