FORD DUMPS CART

Dearborn, Mich. -- Bloomberg Reported that Ford Motor Co. will stop sponsoring teams in Championship Auto Racing Teams Inc.'s open-wheel racing series after 2002 unless CART relents on new engine requirements.

CART, based in Troy, Michigan, is changing its engine specifications for 2003 to make them similar to those in the rival Indy Racing League, which runs the Indianapolis 500. CART hopes the change will make it easier for its teams to compete in the event, the most prestigious in U.S. open-wheel racing.

Ford, based in Dearborn, Michigan, which supplies and subsidizes the cost of racing engines for some CART competitors, said it would be difficult and costly to comply with the new rules.

"Ford is not willing to commit the massive resources required to design, develop and produce a brand-new engine," Dan Davis, director of Ford Racing Technology, said in a statement. Davis said Ford would incur "a significant financial loss in order to participate in a series that today has questionable marketing value."

CART didn't comment directly on Ford's statement. "We're still talking to Ford," said CART spokesman Ron Richards.

Last week, Honda Motor Co. said it would cease supplying CART teams with engines after 2002. Toyota Motor Corp., Japan's largest automaker and the third CART engine supplier, is switching to the Indy Racing League in 2003, creating uncertainty about where CART teams will get engines after next year.

Ford said it would consider staying in the series if CART changes the engine rule.

"If someone comes up with a business proposal that makes sense, we'll look at it," said Kevin Kennedy, a spokesman for Ford's racing program.

Ford proposed, and CART rejected, a single so-called "spec" engine based on its current CART engine. Under the proposal, Ford would supply engines to all CART teams. Ford said such a move would be less expensive for both the automaker and the racing series because competition among companies drives up costs.

Ford's move comes after the second-largest automaker reported a $692 million third-quarter loss and said it would be difficult to earn a profit in the fourth quarter. The company last week cut its quarterly dividend in half to 15 cents a share, which will save more than $1 billion a year. Ford expects to announce a restructuring of its North American operations in December.

CART, which currently uses turbocharged, 2.65-liter engines, is switching to the Indy Racing League's 3.5-liter non-turbocharged formula. CART teams have won the last two Indy 500s. However, that effort required the CART teams to purchase different cars and engines than they use in the CART series. Some CART teams said they couldn't afford the extra expense.

Shares of Ford fell 36 cents to $16.77 while CART shares rose 15 cents to $13.40.