Finance and Economic

Chrysler, which is halting factory operations for at least a month as sales and cash dwindle, will not abandon its involvement in the NASCAR racing circuit but will reduce spending by about one-third, a top executive said on Thursday.

A day after the cash-strapped automaker said it will idle North American plants starting Friday, Mike Accavitti, director of Chrysler’s Dodge brand and head of motorsports, said the automaker will cut spending next year by more than 30 percent.

“We’re not going to pull out. We are going to throttle back,” he told Reuters. “NASCAR is not exempt from anything else that we do to market and promote vehicles.

“We have to reduce our spend. We have to get our expenses in line with our revenues,” he added in a telephone interview. “The market right now for automobiles is at a low point that hasn’t been seen in decades. As we resize the company and resize our expenses, our NASCAR spend is not exempt.”

While cutting spending, Chrysler will honor its contracts with three race teams it sponsors — Gillett Evernham, Penske Racing and Petty Enterprises — as well the track in Talladega, Alabama, Accavitti said.

Chrysler, along with General Motors Corp, is seeking a U.S. government bailout it says it needs to survive in the near term. Democratic lawmakers and industry sources have said any financial assistance would likely cover GM and privately held Chrysler, and total up to $14 billion.

GM has said it is cutting its marketing and promotions budget, which includes NASCAR, by about 20 percent. It has reduced advertising, walked away from expiring sponsorship deals with such teams as the New York Yankees and even ended its endorsement deal with popular pro golfer Tiger Woods faxless pay day loans.

Ford Motor Co said it plans to cut NASCAR spending by about 20 percent, while Japan’s Toyota Motor Corp has said its spending will be lower but has not said by how much.

“TURNING POINT”

“The show will go on, but it might be a reduced-fans-in-the-stand type of show,” said Michael Pitts, associate professor of strategic management at Virginia Commonwealth University.

“This is a real turning point,” he added. “Maybe we find out now the fans really don’t care about the brand of car.”

The automakers have been big backers of the sport in the belief it boosts their brand images as well as sales.

At NASCAR’s peak, GM spent as much as $130 million on the sport, Ford less than $100 million and Chrysler less than that, estimated Peter DeLorenzo, publisher of website www.autoextremist.com. Chrysler is probably spending around $50 million now and is heading toward $30 million, he added.

“Once corporate America starts walking away, what are they going to do?” DeLorenzo said of NASCAR officials.

One industry observer has said the sport should take a break because of the automakers’ struggles. In a column on Slate, self-described fan Robert Weintraub suggested “euthanizing” NASCAR. www.slate.com/id/2206711/ 

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