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Petty: Chrysler bankruptcy affecting teams' cash flow

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Updated Jun 1, 2009 6:24 PM ET
     
 

DOVER, Del.

Team owner Richard Petty says the Chrysler bankruptcy has put cash flow from the manufacturer to the Richard Petty Motorsports organization he co-owns with George Gillett "in a holding pattern." From the point of view of the Dodge Motorsports program, however, the commitment to racing is undiminished.
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"They've stopped everything," Petty said Saturday in the garage at Dover International Speedway. "They went into bankruptcy, and they're sort of in a floating stage right now. They're trying to see where they come out of this at. If they've got new people running the show, are they still going to continue to back everything exactly like they are, or whatever? "They're in a holding pattern right now. I think GM's that way — I don't know about Ford — and I know Chrysler's that way. The rest of them I don't know. I don't deal with them." Monday morning, General Motors filed for bankruptcy under a government-backed reorganization plan. Walter Czarnecki, vice chairman of Penske Racing, which has three Dodge teams, said Monday the legal proceedings also have held up payments to his organization. "In the legal procedure, you have to file what's called a 'Cure Letter' that lists all the things that you are owed. And when it's submitted and approved, they'll pay. We have money that was due April 30 that has not been received yet and probably won't be received for several weeks." Czarnecki expects, however, that with Chrysler's imminent emergence from bankruptcy and the pending merger with Fiat, the situation will straighten itself out relatively soon. Mike Accavitti, director of brand marketing and strategy for Chrysler, acknowledged the reorganization has affected the flow of cash from Chrysler but affirmed the company remains committed to Cup racing and that at-track services provided to the teams continue to be available. "The amount of engineering and other technical services, along with supply of racing components we provide to the Dodge factory-backed teams has not changed," Accavitti said in a statement to Sporting News. "NASCAR remains a strategic part of our marketing plan and the Dodge brand. ... We have commitments to the sport and our teams and plan to continue our sponsorship into the foreseeable future." Cash payments, however, have fallen victim — at least on a temporary basis — to the supervision that comes with a bankruptcy filing. A race team might have to forgo a session on a seven-post rig, for example, if the money from Dodge that typically pays for such a simulation of suspension dynamics isn't available. "As we have previously stated, we remain committed to our Dodge factory-backed teams in the NASCAR Sprint Cup Series," Accavitti said. "During our Chapter 11 reorganization, Chrysler has strictly followed each and every step of the court-supervised process according to bankruptcy law. Interruption to the normal course of business, including supplier payments, is inherent during this process." Clearly, Petty and Chrysler want the same thing. One of RPM's drivers, Kasey Kahne, used the new Dodge R06 engine at Dover, qualified a season-best second and finished sixth. Petty expects to phase in the new engine with his other drivers — AJ Allmendinger, Reed Sorenson and Elliott Sadler — based on an evaluation of its performance with Kahne over the next several weeks. All three Penske teams already have incorporated the R06. "Where is Chrysler going to go? Where are we going to be next year?'" Petty said. "So we've got to start planning right now for how we come out in February at Daytona. All those things are relative to each other, I guess, as far as whatever we've got to do to make it better than what it is. We're still not giving up on this season, by any means. With the new engine deals, we're going to really, really work hard this year to get us in a better position as far as next year."
Tagged: A J Allmendinger, Elliott Sadler, Reed Sorenson, Kasey Kahne

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