Tech Transfer and a Few “Snide” Remarks
Written by Marc Boland · December 15, 2005
Auto racing from its inception has been about being the fastest. For nearly as long, racing in most of its forms, has provided a platform for mechanics, engineers and auto manufacturers to grasp headlines for their winning efforts and also gain market share in car showrooms the world over.
A side benefit of all this racin’ and engineerin’, whether by design or accident, have been improved products for the consumer to purchase for trips to the nearest Stop & Shop to pick up the latest “hot thing” for Christmas. Or a twelve pack whatever the case may be.
While sifting through my daily news feeds I came across an article written for The Auto Channel. Authored by “M Snide” he suggests the days of auto racing being supported by the corporate world are nearing the end of its lifespan. He begins his piece by admitting his “fellow journalists and auto industry observers thought I was once again off target in my view of the future…but guess what…I’m not nuts.”
I won’t argue that point, I’ll let his friends and colleagues debate his sanity. But I will take issue with his basic premise. And frankly he has chosen a current news item, a Michelin announcement it will not supply tires to Formula One after the 2006 season, that is totally unrelated to his basic point. Snide reproduces the press release at the bottom of his article and PitPass has also posted it for those that don’t care to read Snide’s piece.
In short Michelin will pull the plug on F1 because of the FIA’s constant and many believe ridiculous rules changes. To quote Mr. Edouard Michelin, “this decision is the result of profound differences between Michelin’s long-standing sporting philosophy and the way Formula One is managed by the regulating authorities, which no longer provide a clear and sustainable environment to justify long-term investments.” He went on to add: “For Michelin, leaving Formula One in no way represents abandoning motorsports, to which the Michelin brand has been committed for 117 years.”
In addition, the Bernie and Max circus has said they will mandate only one tire supplier when the new rules package comes into effect in 2008. Given the very public war of words between Edouard Michelin and the FIAs Max Mosley (here is Max’s parting shot.), the writing was on the wall for the French tire maker to exit F1.
How that supports Snide’s thesis (Or supports the title of the article: One More Step Toward The End of Corporate Motorsports: Michelin to Quit F-1) is beyond my comprehension but maybe I missed something, you be the judge.
On one point I would agree at least partially, NASCAR is rife with rumors. One that Snide notes are rumors of the last couple years that Ford and possibly General Motors may pull corporate support of the NASCAR series. What he fails to mention, most if not all are, related to NASCAR’s Car of the Future (CoF) that will see full-time action starting in 2007. The CoF has raised some hackles in Detroit because it is such a departure from the “look” of what you buy on the street. And yes there is a valid argument to be made “Stock Cars” aren’t stock but that misses the point.
They are still Chevys, Fords and Dodges and soon to be Toyotas in the fans eyes. And Detroit knows it. But Snide doesn’t and throws out a strawman for an argument:
“Racing fans may be rooting for their favorite drivers but are not rooting for the brands supporting the circuit… the proof: as NASCAR’s ratings have grown and their sponsorship costs skyrocketed, the new car sales of the main supporting brands, Chevrolet and Ford have plummeted…so much for advertising benefits from motor sport sponsorships.”
It is a fact sales of those brands have sunk to new lows and what was formerly called “The Big Three” are bleeding cash like a stuck pig in a Chicago slaughterhouse. Note he offers no proof, other than his word, of a correlation between the TV ratings and sales. And naturally I don’t clutter my brain with such arcane information as a rule, so I went looking. And as I suspected all along, The products being offered for sale suck” but the question is why, why are U.S. manufacturers losing market share?
“This is largely a question of perception, the American consumer looks at their product quality as sub par.” […] “according to the product quality surveys like J.D. Power, the quality difference between U.S. makes and imports has largely disappeared, but years of poor quality has burned a legacy into the minds of consumers,” so says Standard & Poors head of Global Automotive Ratings Team, Scott Sprinzen. The number of recent surveys that support Sprinzen’s thoughts are littered all over Google’s search results.
I’ll also offer this. Fords new family sedan has made quite a splash, selling 15,481 units in November, more than double the number of Dodge Chargers in the same month. Some dealers have an empty spot on their showroom floor so production at it’s Hermosillo, Mexico plant is being doubled. For the benefit of Snide that family sedan is the Ford Fusion. It just happens to be Fords choice to race in NASCAR starting next year. Is there a connection there? I don’t claim to know but that assertion is just as valid as Snide’s. And BTW Ford signed its largest ever sponsorship deal for the last three NASCAR events of the 2005 season. That doesn’t sound like they are worried about RoI, it sounds like the marketing gurus know when, why and how to spend their money in the most cost effective manner.
He continues on with a claim that the Return on Investment (RoI) for sponsors of auto racing is no longer a valid reason to pour cash into the sport.
“Unlike today’s unsuccessful auto company leaders, the next generation of potential big-buck motor sport sponsor’s corporate leaders must make sure that their lean and mean company’s make fiscal decisions based on ROI and facts, not emotion and personal benefit. Investing a stockholder’s assets in a hobby that does not return on the investment is criminal and they will know it.”
Snide went so far as to claim Chevy bailed out of the IndyCar Series because of, to use his words, an “erosion of support” for auto racing. That’s flatout false. GM at the end of this year will leave IndyCar racing to focus on its latest C6-R program. The C6-R Corvettes will compete the in American Le Mans Series (ALMS) road races in 2006 and beyond.
The rest is so easy to debunk and it’s near shameful he even attempted to offer it. Here are a few examples:
1. In a recent survey conducted by Erdos & Morgan, a New York based research firm, and published in Street & Smith’s Sports Business Journal, NASCAR ranked ahead of every other sports property in terms of its ability to market its sport and service its sponsors. The survey polled over 300 decision makers at companies involved in major sports marketing programs.
2. A case study by Performance Research for a potential sponsor: The results indicated that an increased commitment to NASCAR provided a measurable return on investment, and the company now is title sponsor of a team in the Nextel Cup Series.
3. Wall Street stock values soar $300 million
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4 Responses to “Tech Transfer and a Few “Snide” Remarks”
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Very interesting.
Now I am writing this just to see what happens. I want ideas and thoughts, Please.
We all know that NASCAR has very little to do with new model enginnering, carbs, 4 speed trans, push rod v-8’s. All old technology.
Some of the Aero may transfer, but probably not much giving the manufacturers constraints of headlamps that work, grill openings and no tail spoiler. But F1, Enduro racing and W.R.C. have many things that apply to the modern automobile. Fuel injection, traction control, electronic shift trans, etc.
I am wondering if the main reason that the makers are getting out of or reducing their interest in motorsports is because Ford and GM are both bleeding money from every oriface. When Ford got out of F1 (Jaguar) I thought that was the biggest crime I had ever seen. I wonder if the bean counters are getting into the mix at the factories, again. (Remember the early seventies).
As a Mechanic for Ford Motor Company, I have seen the technology from Ford’s Motorsports programs first hand, and wonder if may the good times are over.
As for the perceived quality difference between the domestics and imports. I agree, the gap has closed to where it is almost nil.
Drive a New Mustang and then drive a B.M.W. The body structure feel is very close. Not too bad for a bugdet performance car.
Nice piece marc, as for Mr Snide he is operating on another plane (exactly where I’m not sure). I get the feeling he has studied economics/marketing at university but has only practised it at a theoretical level.
Motorsport will always have Automaker involvement,albeit in fluctuating levels,the adage of “win on Sunday buy on Monday” rings loud.
There is little point in reminding the reader that the days of race car technology flowing over to their road cars are well & truely over, it’s not relevant.Motorsport equals advertising, hence the non motorsport logos of products & services plastered all over the cars.In the modern era, a race car is a moving billboard.Ebbs & tides in the economy will dictate when & how manufacturers compete.
Nice post Marc. I will take a slightly different take on quality equality on imports vs. domestics.
While it’s irrefutably true that Detroit has raised the bar on it’s overall QC efforts, there are still big differences in technology and durability.
Look at the Ford Mustangs solid rear axle as opposed to independent suspension. It was a concious design decision to save money. The hood fit of the Fusion is so wide as to be noticeable, again done to reduce production costs. And the big overall difference is durability. If you want to put 100,000 trouble free miles on a car, most buyers will think Honda before Ford or Chevy.
Ford and GM’s stock values were just lowered to junk status by Standard and Poor’s, due to the huge medical and pension funding obligations incurred over the years. Ford spokesperson has said that pension obligations add $1,500.00 to the sale price of all their vehicles. GM is the largest corporation in history to have it’s stock reduced to junk category.
Can all of the above have any positive bearing on the “Mini Three’s” commitment to racing? You tell me.
There is little doubt that supporting racing adds engineering expertise to any car company’s inventory of talent on all levels. Wether they can continue to pour money into racing while oozing cash from every pore remains to be seen. Bill Ford has refused compensation (reportedly $17 million this year!) untill the company returns to sustainable profitability. Symbolic gesture, yes, but will it impact the vision of the companies direction racing wise?
Time will tell.
Thanks Peter and George.
It’s a good thing I wasn’t my usual snarky self when writing this post. I Emailed “M Snide” the inspiration for the post stateing I had posted a rebuttal to his article.
A few hours later he answered to thank me and say he wanted to post mine along with his.
Turns out the the nom deplume hides the real name of the Executive editor and Co-publisher
at the AutoChannel.com.
As yet I haven’t seen it posted but with the holidays and all that goes with them you can’t expect everything to occur two days before asking.
NOW, back to my regularly scheduled snarkiness!