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Burk's Bowtie Blast!

Bowtie Bankruptcy for the General and a Goodbye to a Good Guy

As I've written many times in my career in auto racing (and all the jobs and careers related to auto racing) there is one constant: Change. The sport and all of us involved in it have to not get too comfortable because as soon as you do, sure as death and taxes, everything will get turned upside down.

Perhaps the most recent example of that would have to be the disintegration of giant General Motor Corporation. GM is the parent company of automotive brands that have been synonymous with and in many cases one of the major supporters of various racing leagues from NASCAR to Indy Car racing to NHRA and IHRA drag racing.

NASCAR has been the biggest beneficiary of GM's years of financial and engineering support. For at least the last 30 years GM's Chevy and Pontiac divisions have spent hundreds of millions of dollars in cash, parts, and engineering support with all of NASCAR's divisions. Now that flow of cash, parts and engineering support has come to a virtual halt. The division of Chevy that developed performance packages like the SS options is closed down and, unthinkably, the General is apparently in the throes of filing for bankruptcy protection under Chapter 11 of the Federal statutes. 

According to a news story out of Detroit, one of the steps GM will have to take is the closing of approximately 1,500 GM dealerships. Six months or a year ago if you told anyone that GM would be declaring bankruptcy in a year you would have been accused of being on drugs. Now that scenario is reality.

So, what happens now to GM's faithful, especially the Bowtie Brigade?  It is reasonable to think that one possibility is that GM will have to sell off some of their brands and, instead of one huge company with a lot of different brands under one roof (GM owns Saab for instance), some of the brands or even specific models could end up being an independent car builder.

Maybe we’ll see the Camaro/Corvette Car Company or the return of the Cadillac brand as an independent company. How ‘bout the GMC/Chevy Truck Car Company? News reports say that right now Cadillac and GMC truck are the two most profitable divisions of GM. I've been told that the Chevy High Performance parts division is profitable and GM says that ACDelco is turning a nice profit. What if those two joined to make one profitable company?

Let's not forget about Pontiac, Buick, and Hummer. All of those were once independent car or car parts manufacturers before being brought under the giant GM company umbrella. What if the bankruptcy judge forces the General to divest itself of some of the brands they own?

Personally I don't think that would be a bad deal. As a guy who has a Chevy and a Buick hot rod, I want to see those brand names stick around for a while. I also think that competition is much better for business than allowing one company to have all of the chips.

Either way this financial fiasco is settled, no matter if one or more of the "big three" automakers declare bankruptcy or emerge from it, I doubt we will ever see a major car manufacturer in the U.S. invest in racing and high-performance cars as they have in the past 50 years.

I believe the best thing for all concerned may be that GM does get broken up and we consumers and high-performance wonks end up with more independent car manufacturers and dealers. I like the idea of more choice and competition in the car business. Choice and competition are the backbone of the high-performance business.

It seems to me that for nearly a half-century, the titans of Detroit automakers, Ford, Chrysler and General Motors, have strived to eliminate competition. Now they are paying the price for over-building, over-paying, over-confidence, and perhaps more than a little arrogance.

What lies ahead for the Chevy faithful and the rest of the GM brand loyalists is anyone’s guess. Chevy might become a brand on its own. GM may keep all of its brands and eventually return to building SS Camaros, Impalas, and Cobalts. We'll just have to wait and see what changes are made and how they affect the Bow-tie Brigade.

Max Chevy covers all automotive things Chevy. A new issue of MaxChevy.com is published every other month and is updated weekly.

 

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