Editor's Note: In the last five years of bringing you The High-Octane Truth, Peter has written countless columns that have reverberated and resonated through the halls of what's left of the "Big Three" - and, indeed, throughout the industry - but few have generated the torrent of email as last week's column about Detroit's misguided fascination with all things NASCAR. With that in mind, and with many auto executives on vacation over the next two weeks, we thought we'd leave the column up another week. - JJP
Since starting this website five years ago, I've built a reputation by 1. Talking about things people in the business are usually only comfortable with discussing in private conversations or after hours, 2. Talking about things that executives are only willing to discuss with journalists "off the record," or in "deep background" conversations, and 3. Talking about things that others haven't even thought about yet, which inevitably become topics of the moment in the business, thanks to us. In short, creating Autoextremist.com and writing The High-Octane Truth every week has become about leading the discussions crucial to the industry, it's about being out front, and in some cases, it's about saying things people don't want to hear, but who, in private moments, admit are unflinchingly accurate, albeit as painful as that may be.
With that reminder, today I'm going to lead the discussion on why Detroit's infatuation with all things NASCAR needs to come to an end. On the surface, this might be about as popular as suggesting that mom and apple pie have outlived their usefulness, but the reality is that NASCAR has become counterproductive to "Detroit" - and its cumulative and urgent interest in stemming the import tide, and it desperate mission to stop the erosion of market share in the North American market.
Heresy? In some circles, you bet.
But there is a growing belief in executive suites around the Motor City that NASCAR has outlived its usefulness, which is a tough stand to take, especially when you look at all that comes with NASCAR in its current form. It's the No. 2 spectator sport in the U.S. behind the National Football League. Its weekly races generate the kind of consistent viewing numbers that make Madison Avenue media mavens grin with a "cha-ching" soundtrack dancing in their heads. And NASCAR has exploited every opportunity to orchestrate a monster multi-billion dollar marketing juggernaut that has sponsors clamoring for a piece of the action (well, it used to, anyway. Lately, NASCAR has been in the throes of an actual sponsor exodus, as companies have found out that participating in NASCAR is all about promoting the NASCAR brand and little else).
But what does that really mean to Detroit? What does NASCAR actually have to do with helping Detroit in its quest to hold market share - or even increase it? DaimlerChrysler, Ford and General Motors spend $75 million each on their NASCAR programs. That includes direct payouts to teams, drivers, promotions and advertising support. What, exactly, does Detroit get for its money?
In a few words? Not a damn thing.
First of all, NASCAR has created a cult of personality based on its drivers (and their car numbers) and their teams. The drivers are the first priority for NASCAR's marketing machine, and they've been extremely successful creating this cult of personality - based on the number of TV commercials, print ads and promotions that we see with NASCAR drivers involved.
Second, NASCAR has created a marketing environment for its participating sponsors second only to the NFL in both its effectiveness and in the pampering way they treat their sponsor representatives at the events (which helps mask the fact that the sponsors are putting more into furthering NASCAR's interests than they are getting a return for their investments).
Third, NASCAR has created a marketing vehicle only loosely based on the actual racing. Instead, it's all about "the show" - and NASCAR does everything in its power to enhance that show - with sponsors, the car companies and especially the fans taking a backseat to NASCAR's "vision" for what constitutes entertainment.
What does that last point mean, exactly?
It means that NASCAR has taken gradual steps over the last decade to equalize the competition, figuring that if "the show" has as close to a boffo ending every week that they can possibly orchestrate, then the TV numbers will stay up, and the whole machine can get fueled for even more sponsor participation - i.e., even more money.
But in their zeal to orchestrate "the show" - NASCAR has proceeded to make Detroit's participation irrelevant. The cars, masquerading as the Dodge Intrepid, Ford Taurus and Chevrolet Monte Carlo, are now defined by "headlights" and grille openings created by different decals, and if you squint real hard they look like the cars' street counterparts (sort of), but in fact, the car bodies are identical, with heavy restrictions due to aerodynamic controls and the quest to "equalize" the competition. Not to mention the fact that the cars populate rental car fleets across America and are completely useless in Detroit's fight in staving off their import competitors.
What is Detroit getting, exactly, from their involvement in NASCAR?
I'll reiterate an earlier point, only this time with an assist from the late, great R&B singer Edwin Starr - absolutely nothing.
The NASCAR marketing machine is in place to do one thing: Promote, enhance and expand the NASCAR brand. Period.
They use their drivers to create a "cult of personality" in order to orchestrate and perpetuate that mission.
And they use their sponsors in the same way.
In a now annoying ritual, NASCAR drivers, in a typical post-race Victory Lane interview, first thank their car sponsors in an endless regurgitation of a laundry list memorized for the occasion, then they thank NEXTEL, the series sponsor, then they thank the sponsor of the actual event itself. If Dodge, Ford or Chevrolet is mentioned, it's in a brief throwaway line that inevitably gets lost in the shuffle.
Detroit's participation, in short, has become an afterthought.
NASCAR makes no bones about the fact that it believes it can get along just fine without Detroit, either. Moving closer to even more of a "spec car" series in the interest of "the show," NASCAR is contemplating building the center sections of the cars and only allowing teams to finish them off for their particular "brands" at their shops - all in the interest of making the cars as identical as possible. NASCAR has even discussed making and selling "spec" engines that remove any chance for a manufacturer to exploit any engineering advantage discovered. Heaven forbid a manufacturer be actually encouraged to use racing for what it has always been used for - to push the envelope, to innovate and to explore new technologies that end up improving production cars that we can all enjoy on the street.
Detroit is wasting a cumulative $225 million on NASCAR. And wasting is the operative and dead-accurate word to use here. Here they are locked in the fight of their lives, literally for their very survival - and they're pissing away a quarter of a billion dollars every year to advertise their rental car fleets and help fuel NASCAR's marketing machine.
What Detroit is doing in NASCAR has nothing to do with racing - instead, it has everything to do with perpetuating the NASCAR brand and enhancing "the show." And for those very crucial reasons, Detroit is being classically underserved in its interests.
There are several other viable racing series in this country that allow Detroit to actually go head-to-head with the same import competition that they face in the showrooms every day. Those venues, like the SPEED World Challenge and the American Le Mans Series, offer import-oriented consumers a real opportunity to see Detroit products in action, and they can do wonders for Detroit's credibility. When Detroit can't even get on most import buyers' radar screens, they've got to go out of their way to do everything possible to change that - and pissing away millions on NASCAR's glorified branding exercise isn't going to cut it.
The perpetual problem in Detroit is that nobody high up enough in these companies has the cojones to say "no" to NASCAR. Their marketing minions trot out the usual TV numbers and sponsor mumbo-jumbo, but nobody has the guts to ask the tough questions, such as - what are we selling here? And what are we really getting for being part of NASCAR's show? Or, are we making a dent in the consumers we need to reach, or are we just placating a diminishing domestic-oriented constituency?
And nobody in the motorsports departments wants to deal with the reality of the situation either. Given the choice of racing in NASCAR or not racing at all, they will always just shrug their shoulders and go along to get along with the NASCAR juggernaut. It's as much about inertia as anything else.
And that's just a flat-out travesty.
Two years ago, General Motors walked away from one of the most important racing programs in its history. Their Cadillac American Le Mans Series prototype racing program had endured setbacks and fits and starts, yet they were just on the verge of becoming consistently competitive against the dominant Audi racing program. But then they walked away from it, ostensibly because "they just didn't have the money," as one of GM's top executives pointedly told me at Pebble Beach last summer. So, instead of going head-to-head against Audi for the overall win at the 24 Hours of Le Mans - the most prestigious sports car race in the world - GM folded its tent and cancelled the program.
It was one of the most momentously wrongheaded decisions ever taken by an automobile company. And the real reason was not that GM didn't have the money, the real reason is no one had the cojones to say "no" to the NASCAR machine. So, instead of competing for the hearts and minds of imported car intenders around the world with their resurgent Cadillac brand, they shored up Monte Carlo's stature as one of America's favorite "go to" rental cars.
The sooner Detroit collectively realizes that they're just another sideshow in the NASCAR circus, the better off they'll be.
It's time for Detroit to finally pull the plug on their NASCAR involvement.