original carter-racing-case.pdf

8/17/2019 original Carter-Racing-Case.pdf

1/3

Carter

{.acirg.

by

Jack

Brittain'&

Sim

Sitkin

David

Eccles

School

of

Business,

University

of

Utah

John

Carter was

not

sure,

but

his

brotirer

and

partner,

Fred

Carter,

was on

the phone

and

needed

a

decision.

Should

hey

run

in

the

race or

not?

t

had

beena successful eason o ar, but thepoconorace

was

mportant

because

of

the prize

money

and

TV

i

exposure

t promised.

This

first year

was

hard

because he

team

was trying

to

make

a

name

or

itsel{

and

so

had to run

in a

Iot

of

small

aces.

A successful

outing could

mean

more

sponsors,

a chance

o start

'

making

some profits

for

a

change,

and

the

uxury

of

racing only

tlie

major

events.

But if they

suffered

anotherengine

ailure

on

national

elevision

..

These

engine

failures

are

exasperating,

hought

John. The team's

car

had

failed

seven

times

in

twenty-four

outings

this

season

with

various

degrees

of damage o the engineand car. No one could fizure

out

why.

It took

a

lot

of sponsor

money

to

replale

a

$50,000

racing engine,

and

the

wasted

entry

fees

were no

small

matter

either.

John

and

Fred

had

everything they

owned

riding

on

Carter

Racing.

This

season ad to

be a success.

Paul

Edwards,

the

engine

*r.hurri ,

was

guessing

the engine

problem

was related

to arnbient

air

temperature.

He argued

that

when

it

was cold,

the

different expansion

rates

or

the

head

and

block

were

damaging

the head

gasket

and

causing

the

engine

failures.

It was below

freezing

ast

night,

which

meant

a cold morning for starting he race.

Tom

Burns, the chief

mechanic,

did not

agree

with

Paul's gut

feeling

and

had.data

o support

his

position (see

Extribit

1).

He

pointed

out that the

l0

gasket

failures

had

occurred

over

the

entire

temperature

range, which

meant

temperature

was

not

the

issue.

Tom had been

racing

for

twenty

years

and

believed that luck

was

an irnportant

element

in

success.

In racing,

you

are

pushing

the

limjts

of

what

is known,

he argued,

and that

means

some

things

are not

going

to be under

control.

If

you

want

to

win,

you

have to

take

risks,

and

everybody

in

racing

knows it. The drivershave their lives on the line, I

have a career

hat hangs

on

every

ace,

and

you

guys

have every dime

tied up

in the

business.

That's

the

tluill

of

it:

beating he

odds

and

winning.

Last

night

over

dirner

he had added

o

this

argument

orcefully

with

what he

called

Bums'

First

Law

of

Racine;

Nobody

€ver won a race

sitting

n the pits.

@

ack

W.

Brittain,

Sim Sitkin

1986,

evised 2000

John,

Fred and

Tom

had

discussed

Carter

Racing's

situation

the

previous

evening.

This

first

season

was a

success

rom

a

racing

standpoint,

with

the team's car finishing in the top five in 12 of the 15

races

t completed.

As

a result,

the

sponsorship

offers

:

critical

to the

team's

business

success

were

startins

to

come

n.

A big break

had come

two

weeks

ugo

#. .

the

Dunham

race,

where

the

team

scored

its

fourth

first-place

finish. Goodstone

Tire

had

finally

decided

'

Carter

Racing

deserved

ts

3ponsorship

at

pocono

_

worth

a much

needed

$40,000

--

and

was considerine

a

full season

contract

for

next

year

if the

team's

cai

finished

in the top

five

in this

race.

The

Goodstone

sponsorship

was two

million

ayear,

plus

incentives.

Jolm

and

Fred liad gotten

a

favorable

response

rom

Goodstone's

Racing

Program

Director

last

week

when theypresented heir plans for next season,but it

was

clear

that

his

support

depended

on

the

visibiliry

they

generated

n this

race.

John,

we

only have

another

hour

to decide,

Fred

said

over

the

phone. At

the

end

of flre

Dunham

race,

before

we

got

the

$40,000

rom

Goodstone,

we

were

980,000

in the

hole.

If we

withdraw

now, we

can get

back

half

the

$30,000

entry.

We will

lose

Goodstone, hey'll

want

$25,000

of

their money

back

and

we'll

end the

season

$50,000 n the

hole. If

we

run and

finish

in the

top

five, we

have

Goodstone n

our

pocket

and

can

add another

car next

season.

ou

know aswell asI do, however, that if we run and ose

another

engine,

we are

back

at

square one next

season.

We will

lose

the

tire

sponsorship,

and a

blown

engine

is

going

to

lose us

the

oil contract for

sure. No

oil

company

wants

a

national

TV audience

to see a

smoker being

dragged

off the track

\vith their

name plastered

all

over

it.

The oil

sponsorship s

$800,000

hat

we cannot

ive

without.

Think

about

t

-

-

call

Paul and

Tom

if

you

want

--

but I

need

a

decision

n an hour.

John

hung up

the

phone

and

looked out

the

window at the crisp

fall

sky. The

cars were

already

on

the grid, spectators admiring

the gaudy paint,

excitement

mounting

n anticipation

of the

start.

This

was what

made racing

at

this

evel special,

he

carson

display

with

crowds

mingling

around

and waiting

or

the engines o

roar

to life.

In

an

hour, they

would

retreat to the stands

and

the cars

would

circle the

track

n

anticipation

of the

start.

The temperature

ign

acrosshe

street lashed

40

DEGR_EES

:23 4.M.

Copyright

ack

W.

Brittain.

photocopied

ryith

permission


2/3

Exhibit

1: Note

rom TomBurns

Johr,

I

got

he data

on

the

gasket

ailure

probiem

iom

Paul.We

have

un 24

races his season, ith

temperaturest

race

ime

anging

rom

53 o 82

degrees.aulhad

a

good

dea

n suggesting

e ook nto his,but

as

you

can ee,

this s not

our

roblem.

I tested

he

data or a borrelation etween

emperatur€

nd

gasket

ailures,

and

oundno

relationship.

Table

.

Relationship

etween

emperature

nd

Gasket

ailures

Breaks

n

Head

Gasket

During

Each

Race

85

Ambient Air Temperature

(tn

degrees)

In

comparison

with some

of

the

other

eams,we havq

done

extremely

well

this season.

We have

inished 62'5%

of

the races,

and

when

we finished we were

in the top five

80%

of

the

time. Our

rate of blown

engines

s 29Yo,

but

we

are

running

fast,

so

we have o

expect

some

difiiculties.

I

am not

happy

with

the

engine

problems, but I

will

take

the

four first-piacefinishes and50o/oate of finishing in the money over sevenenginesany day. If we.continueto run like

this,

we

will

have

our

pick

of sponsors.

Torn

&


3/3

Carter

Racing

B

by

Jack

Brittain

& Sim

Sitkin

David

Eccles chool

f

Business,

niversity

f Utah

Get PaulEdwards or me. Johnwas calling to

get

his

engine

mechanic's

opinion

on whether

they

should

run

today or

not.:The

data

Tom

put together

indicated

temperature

was

not

the

problem, but

John

wanted

o

get

Paul's

direct

assessment.

Paul

Edwards

was

a

classic

gas

statiott

mechanic,

with fingemails

permanently

blackened

by

greaseand

clean

coveralls

for

the

first

two

miautes

on

Saturday

nomings.

He had

been

knocking

around

the

professional

circuit

for

ten

years after dropping

out of school at sixteen o follow drag racing' He

lacked

the

sophisticated

engineering

raining

that

was

getting

more

cortmon

in racing,

but

he did

know

racing

engines.

John

had

discussed

he

gasket

problem

with

Paul

two

days

ago,

and

as he waited

he

reflected

on the

conversation

hey had.

Paul

was

a man

of few

words

and

not

given to overstatement.

The

way

I see

t,

the

turbo-pressure

during

warm-up

--

in

conjunction

with

the

different

expansion

ates

or

the head

and

block

-

is

doing

a

number

on

us, was

about

the

extent

of his

analysis.

It was

his

opinion

about the

cause

of the

problem, and he would not represent t as anything

else.

It

was

the

same

story John

had

heard

twenly

times,

but

it

just

did

not match

Tom's

data.

Paul,

we

have

chewed

his

over

before,

but how

do

you

know

this

is

the

problern?

When

we

ran

at

Riverside

the

temperature

was 75

degrees

and we

still

lost

the

gasket and

engine.

I

am not

sure

what

happened

at Riverside,

Paul

had

replied.

I

am not

sure

that

temperature

s the

problern, but

it

is the

only

thing

I

can

figure

would

lead to

the

stresseswe are seeing. t is definitelythe

gaskets hat

are

blowing

out

and

causing

he

engine

to

go.

All

of

the

engines

have

failed

in different

ways,

and

all

the

failures

were

due

to loss

of

cooling

or

lubrication

caused

y

a

i;asket

ailure.

Part of Carter Racing's successwas due to a

unique turbo-charging

system

that Tom and John

had

developed.

They

had

come

up with

a

new

headdesign

that allowed

them

to

get

more turbo

pressure o the

engine

wbile maintaining

fuel

consumption

at a fairly

constant

evel.

By

casting

the head

and

turbo bodies

in a high-strength

aircraft

alioy, they

had

also

saved

almost

fiffry

pounds

of

weight.

The

alloy

they were

using was

not

as

temperature

sensitive

as he

material

in the

engine

block,

but

the

head

gasket should

be

able o handle

he'differences.

John

could

hear

the sounds

of

race

day

in

the

background

as

Paul

approached

the

phone.

Hello

John,

he said,

obviously

excited. The

Goodstone

coveralls

just

got

here.

We are

talking

some

fine

threads,

and

no

sew-on

patches from

these

guys. The

logo

on

the

back

and

our

names

are

stitched

right

into

the material.

I

guess this

means

we

get to

keep

em'

Course,

I

got some

grease on

mine

already,

so

they

probably won't

want'em

back

anyway.

That

is

great, John

said'

Look,

I want

to find

out

what

w€

are

doing

about

the

gasket failure

business.

The

car

is set

to

go. We

have

been

using

a

different

seating

procedure

since

Slippery

Rock

and

had

no

problems

for

two

races'

Tom

says

the

Goodstoni

deal

is set

as long

as

we

finish

in

the

money

today.

The

guys in

the

shop

want

this

bad'

Goodstone

is

a

class

act;

they

can

make

us

the

number

one

eam

on'the

circuit

if

we do

well'

Copyright

Jack

W.

Brittain. Photocopied

rvith

permission.

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