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Penske, Saturn Sure To Make Scene As Detroit Struggles, NASCAR Scrambles

June 15, 2009 (Charlotte, NC) – There was a lot of the normal hand wringing at Michigan International Speedway this weekend as NASCAR invaded the Detroit area, the long-time epicenter of the American automobile industry. It’s always that way, regardless of the economy, when NASCAR is in the backyard of the ‘Big Three’ – General Motors, Ford and Chrysler. Everyone is on their best behavior, saying the right things, putting their best foot forward in an effort to win favor with the manufacturers.

That happens every year the NASCAR crowd hits the ‘Motor City’ and it was certainly the case this past weekend after the recent economic slowdown has sent the Detroit carmakers into an economic tailspin. NASCAR has also felt the pinch of this downturn with fewer sponsorship, marketing, and team manufacturing support dollars. Last Friday, GM, which filed for bankruptcy protection a week earlier, announced it would make significant cut backs in NASCAR team financial and development resources as it reorganizes.

To say everyone was on edge is an understatement. Well, almost everyone.

One NASCAR member who wasn’t dancing on strings – or at the end of his rope – was Roger Penske. In fact, when it comes to the automobile industry and racing, Penske theoretically is in a better position than anybody to transition into whatever the future holds. That’s because on June 5, he signed a memorandum with General Motors that would add the Saturn brand and 350 dealerships to his own automotive empire – Penske Automotive Group.

Talk about being in the catbird seat.

While the rest of the on- and off-track automotive world is sweating the current hard economic times, Penske has been all smiles since announcing his plans to acquire the Saturn brand. The deal, which is expected to close late this summer, gives Penske the ultimate leverage as a racer.

Think about it for a second. While Penske may have affirmed his love all weekend for Dodge (his current brand of NASCAR race car), there’s no doubt that here you’ll be seeing a Saturn Aura (below right) whizzing around a racetrack near you when the MoPar deal runs out.

Book it now. It’s a cinch.

After all, as the owner of the Saturn brand, Penske can make marketing and racing decisions that benefit both his car line and race team. No more sucking up to car company execs that don’t understand or want to be involved in racing. With the acquisition of Saturn, Penske can sign off himself, cutting the deal to give his teams all the factory resources needed to be successful.

Additionally, ‘the Captain’ can also fund his teams at the sponsorship level spreading the cost of operating the racing program to the other companies under the Penske Corporation banner. Included in those companies are Penske Automotive Group (310 franchised dealerships in some 20 states, Germany, Puerto Rico, and the UK before the acquisition of Saturn and its 350 dealerships); Penske Truck Leasing (200,000 vehicles, 1,000 locations); Truck-Lite (safety lights for boats, buses, cars, commercial trucks, construction equipment, and recreational vehicles); Penske Logistics (transportation and warehousing); VM Motori (design and production of diesel engines); DAVCO (diesel engine filter systems); and QEK Global Solutions (vehicle fleet asset management).

Look for every one of them to be a sponsor of the new Saturn Cup venture. Most of them already are now on as select event primary sponsors or as major or secondary associates on Penske’s Cup and Nationwide Dodges.

Having the ability to provide his own sponsorship – basically paying himself to race – gives Penske yet another building block in bringing Saturn to NASCAR.

Penske even has a partner in Saturn’s previous owner – General Motors. GM is going to continue to produce the Saturn for Penske for at least two more years. That means the Aura will continue to be built right next to its GM twin, the Chevrolet Malibu, at GM’s Fairfax Assembly Plant in Kansas City, KS. When Penske decides to bring Saturn to NASCAR, he’ll already have a Chevy V-8 production and racing engine at his disposal.

This is huge because the greatest cost to any car brand looking to join the ranks of NASCAR is developing a pushrod style, normally aspirated V-8 engine. Despite the fact that it’s archaic technology in today’s modern overhead cam, fuel injected automotive world, the engine development and engineering/manufacturing costs of a NASCAR engine are astronomical. Just ask Toyota.

With the under the hood development costs out of the way, NASCAR and its ‘Car of Tomorrow’ all but erase any other road blocks Penske has in bringing his new car line to the racetrack. Thanks to the NASCAR spec-box. Uber-template racer, all Penske has to do is to do is change the noses and decals on his current fleet of Dodge stock cars and presto! – meet the new Saturn Aura Cup car.

Still don’t think this is going to happen?

Here’s predicting that not only will Saturn be a NASCAR manufacturer player within five years, but that they won’t be the only one. NASCAR CEO Brian France all but invited any manufacturer worldwide to join the NASCAR party this past weekend at Michigan when he stated “we’re the pre-eminent place in North America for car manufacturers to build their business with an auto racing group. We remain that and clearly there are some companies that are going to look at opportunities that may not have even been there in the past that could be presented in the future.”

Chevy, Ford, Dodge in trouble? No worries for Penske, or apparently NASCAR either, as they are already looking toward a Sprint Cup future that includes new brands and fresh opportunities.

Until then, let the hand wringing continue.

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