Iredell feeling NASCAR struggle

By Bethany Fuller | Statesville R&L

The economic downturn, dwindling sponsorships and the Car Of Tomorrow have all been blamed for the layoffs plaguing the local motorsports industry in recent months.

For fans around the world, it's been a nail-biting experience to see if their favorite NASCAR team will survive. It's too early to know what the long-term fallout will be, but the decline of one of Iredell County's biggest industries is going to pack a big punch during the coming year.

Mooresville, known as Race City USA, will absorb the heaviest blow to its work force and economy.

Russell Rogerson, economic developer for the Mooresville-South Iredell Economic Development Corporation, said it would take a comprehensive study to determine an exact dollar amount.

Motorsports is a $6.5 billion industry in North Carolina, with the Charlotte region accounting for $5 billion of that figure.

More than 700 racing-related jobs have been lost in recent weeks and more layoffs are possible in 2009, according to the N.C. Motorsports Association.

Layoffs have been announced at Hendricks Motorsports, Joe Gibbs Racing, Roush Fenway Racing and Dale Earnhardt Inc.

And Gillett Evernham Motorsports in Statesville let 65 employees go in November when the team decided to scale back its Nationwide Series operations because it didn't have enough sponsorship in place to run the full Nationwide schedule.

Mooresville has 120 motorsports-related companies, which provide more than 2,000 jobs. Other businesses from catering companies to car detailing businesses have customers who work at the race shops.

As a "rule of thumb, if you look at a dollar spent on the community that dollar will turn over two to five times," Rogerson said.

'Money buys speed'

Former Penske Racing South President Don Miller said NASCAR and other professional sports are cyclical in nature, meaning it's not unusual for the field to thin out a little and then build back up.
"I think what you're seeing right now is a major course correction for the sport," he said. "The fact that it all happened at the end of the season was dramatized. It's no single one person's fault. This sport has gotten way out of control."

Sponsorship is a big deal, Miller said. A Sprint Cup team needs from $14 million to $21 million to operate and be competitive.

"If they won every race, they still couldn't afford it," Miller said. "Money buys speed."

DEI had to scale down from four to two cars because of dwindling corporate sponsors. The result of that is a reduction in work force, which included high-paying jobs such as fabricators and painters.
Sponsoring a Sprint Cup or Nationwide car or a speedway can be a good marketing strategy.

It is one Lowe's Companies Inc. considered when it signed its sponsorship contract with Speedway Motorsports Inc. for the Lowe's Motor Speedway in Concord in 1999, Lowe's spokeswoman Chris Ahearn said.

At the time, Lowe's was trying to expand nationwide, and the televised race coverage offered a national marketing avenue.

Lowe's announced earlier this year that it was extending its sponsorship contract with Lowe's Motor Speedway for one year to re-evaluate its marketing value, Ahearn said. The speedway is owned and operated by Speedway Motorsports Inc.

"It really is a matter of evaluating all of our marketing opportunities to make sure we are getting the most for our dollars," Ahearn said.

Lowe's has separate sponsorship contracts with different motorsports ventures. One is for the race teams it sponsors, such as the No. 48 Sprint Series car with Hendricks Motorsports.

Ahearn said the company has a multi-year contract with Hendricks Motorsports for the No. 48 car, currently driven by three-time Cup winner Jimmie Johnson.

"What you see in the layoffs is just the tip of the iceberg, and you know what the iceberg did to the Titanic," Miller said. "Every time a team like that goes out of business, it hurts a lot of little businesses all over Mooresville."

Help for displaced workers

State Rep. Karen Ray (R-95th District) owns BSCI Energy Impact Systems, which supplies roll-bar padding to the racing industry.

Her business hasn't felt a big impact at this point, but she's bracing for it.

"The season has ended right now, and purchases are slow now anyway," she said. "All supporting industries have a concern because the NASCAR teams are a viable part of this region. We want them to succeed for a lot of reasons."

Naturally, job loss of this magnitude is going to have an impact on Iredell County's economy, said Mooresville-South Iredell Chamber of Commerce president Karen Shore.

The N.C. Motorsports Association has formed a Motorsports Employment Task Force to help people who have lost their jobs. The task force is trying to assist displaced workers sign up for unemployment and health insurance.

"Most times when you are told you lost your job, I think people have to go home and settle in and gather their thoughts," Ray said.

Because most motorsports employees are highly skilled, Ray and Miller suspect that it won't be hard for them to find new opportunities in the area.

"There is a big difference between a guy who is a body man at a body shop and a fabricator at the race shop," Miller said.

A good fabricator makes around $60,000 annually, Miller said.

Rogerson said he's been working with the N.C. Department of Commerce to help race teams find ways to diversify in different sectors, such as aerospace.

"We've been out and looking," he said. "There is quite a bit of technology. There is some very high tech testing and skill sets. The technology involved in motorsports is incredible."

A silver lining?

Ray said she believes that the motorsports industry and supporting industries will recover. Team and business owners know how to tighten their belts when they need to.

The positive part of the shake-up, she said, is that some of the naysayers around Mooresville will now realize how vital motorsports is to the area.

"The jobs of racing can't be offshored," she said. "You aren't going to go to Europe to build a stock car for NASCAR."