What Happens to NASCAR If GM Files Bankruptcy?

As we all know, the auto makers have been going through a brutal period. Japanese, German, American, French - it doesn't matter where they are from. All indications are GM is going to file bankruptcy. From a motorsports perspective, the question is what happens to NASCAR?

GM lost over 30 billion dollars in 2006. It just lost another 30 billion in 2008. The company is in horrific shape and it appears there is no way it can hold off filing bankruptcy. The powers that be at GM, the unions and the government have been trying to find a solution, but the business model appears to simply be a dud in these modern times.

There are many questions about what a bankruptcy filing would mean. What about all the retired GM workers who are living off of pensions and a health plan that can no longer be supported? What about the current workers? These are serious questions that have no nice and clean answers. Bankruptcy is going to be brutal.

Motorsports are just that...sports. They are obviously not as serious as real life issues like people losing their jobs. Still, one has to consider what will happen to the NASCAR series when GM files. If health plans are being canceled, you can be a bankruptcy judge is not going to look positive on spending money on auto racing. This could lead to a massive amount of turmoil in NASCAR.

Consider the Sprint Cup, the top series in NASCAR. The big GM brand is Chevrolet. Teams like Hendrick, Earnhardt Ganassi, Stewart Haas, and Richard Childress Racing all drive Chevrolets. These teams include such notable drivers as Jimmie Johnson, Tony Stewart, Jeff Gordon, Mark Martin, Dale Earnhardt Jr., Ryan Newman, Kevin Harvick, Jeff Burton, and Martin Truex. All could be thrown into turmoil.

If GM were to file bankruptcy tomorrow, the fallout would be tremendous. All contracts GM has agreed to suddenly are frozen. The bankruptcy court can cancel them if it so desires. This effectively means any supplier to GM or these teams is going to be worried about not being paid. In such a situation, all the Chevrolet teams will face a credit crisis. The hope would be that NASCAR would step in and provide a guarantee of payment, but there are no clear indications NASCAR is in a position to do that.

Most people can't picture GM actually being liquidated, but you should open your eyes. The company is not going through a bump in the road, it is going through a major bloodletting. A company that loses $30 billion dollars a year before the current recession hit [2006] doesn't need a "little help". It has fatal flaws.

A more reasonable guess of the outcome of any GM bankruptcy would be the company would be broken up into smaller pieces and sold off - a great American institution put out of its misery. If this comes to be, the NASCAR season is going to be a disaster with half the teams suddenly having no cars and parts. What a mess.