SBD/March 14, 2011/Marketing and Sponsorship

IndyCar Owners Opt For Known Commodity In Deciding To Retain Firestone

Firestone will increase price of tires, decrease sponsor participation under deal
The Izod IndyCar Series and Firestone Friday agreed to a two-year extension of their partnership, as IndyCar team owners "wanted no part of breaking in another manufacturer while it tries to launch a new car," according to Curt Cavin of the INDIANAPOLIS STAR. IndyCar "accepted what essentially is the same proposal Firestone offered in early January." Firestone will "increase the price of tires, reduce its sponsor participation and end its association as the title sponsor for the Indy Lights division after this season," giving IndyCar "time to land a replacement title sponsor." Cavin noted team owners "were unanimous in support of giving Firestone what it sought in cost reductions," and both sides "are happy even though the price for teams likely will almost double." IndyCar CEO Randy Bernard "still thought he had a chance to save the deal with Firestone until he read the company's quotes" in the Akron Beacon Journal "about layoffs in the area." Bernard: "That's when I knew it was real. That's when I got worried and went to the team owners" (INDIANAPOLIS STAR, 3/13).

HAPPY TO STAY TOGETHER: IndyCar driver Dario Franchitti said, "They got all the owners to agree on something and to agree on something that is going to cost them money, so it must be important. To the drivers, it was a no-brainer. We all knew what we wanted" (SI.com, 3/14). Franchitti added, "I can't overstate the confidence we have in Firestone running the speeds we do at Indianapolis and Texas. We never think about tire failure, it's not part of our thought process and they are just a great partner." SPEEDTV.com's Robin Miller noted though the price is "likely to double from $278,000 to $550,000 in 2012, the owners were unanimous in their support of staying with Firestone." Bernard said of the old deal, "It was my job to negotiate as hard as we could and we let it expire because it wasn’t in the best interests of our teams. And it wasn’t that the owners didn’t want another manufacturer as much as it was the fact there wasn’t enough time to build a tire like Firestone’s. So we had a meeting and they all agreed that we need a successful tire with our new car and they were unanimous in wanting to stay with Firestone." Bridgestone Firestone Racing Exec Dir Al Speyer: "There were a lot of late nights and lots of details to work out and I’m a little surprised it got done this fast. But I think it’s a good day for us and a good day for Indy car racing." Miller noted Speyer "imagines his company will continue to provide marketing and promotional support" for the Indy Lights series after this season, "although probably not to the extent it is today" (SPEEDTV.com, 3/11). Speyer said Bridgestone and IndyCar engaged in "intense team efforts" to reach an agreement. He also noted that Bridgestone Americas CEO & President Gary Garfield "became involved" in the talks. In Ohio, Jim Mackinnon noted employees who "make Bridgestone's Firestone brand race tires in Akron will have jobs through the fall of 2013," though Speyer said that "there still could be some job reductions in Akron caused by the decision not to supply the Indy Lights series after the current season ends" (AKRON BEACON JOURNAL, 3/12).
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