Dale Earnhardt Jr. working on extension

LAS VEGAS -- Despite Dale Earnhardt Jr.'s struggles on the track, Hendrick Motorsports has begun negotiating a contract extension for NASCAR's most popular driver.

Team owner Rick Hendrick told ESPN.com of his plans Thursday after Earnhardt was named the sport's most popular driver for the eighth straight year during the National Motorsports Press Association Myers Brothers luncheon at the Bellagio.

"We're looking at extending it," Hendrick said of Earnhardt, who just completed the third year of a five-year deal that ends in 2012. "I really like him. I think the world of him. I know he can do it. We just have to get the right combination in, and I think we're going to have it.

"I hope we get to race together until he retires ... until I retire. I'll retire first," he said.

Extending the contract would end any speculation that Earnhardt might move his Nationwide Series program to Sprint Cup after 2012 and drive for himself or go to another team.

But Earnhardt's first priority is making sure the next time he returns to Las Vegas for the season-ending banquet it is as a member of the Chase field and not just to get a popularity award.

"The only person that can truly help me get where I need to go starts with me, then it goes to Rick, Steve [Letarte] and those guys in your inner circle every week and in your corner every week," said Earnhardt, who finished 21st in points.

"My biggest problem, I think, is my confidence," he said.

Earnhardt is closing in on the record 10 straight most popular driver awards won by Bill Elliott from 1991 to 2000. Elliott is the all-time winner of the award with 16, followed by Richard Petty with 10, Earnhardt with eight and Bobby Allison with seven.

Earnhardt won despite finishing 21st in points and missing the Chase for the second straight year and third time in four seasons. He is in the midst of a 93-race losing streak dating back to Michigan in 2008.

Hendrick is doing all he can to fix the No. 88 team. He announced last week that Earnhardt was moving into the same shop with five-time defending Sprint Cup champion Jimmie Johnson and pairing him with Letarte, who had been Jeff Gordon's crew chief.

Gordon will now share a shop with Mark Martin and have Alan Gustafson as his crew chief.

Johnson's crew chief, Chad Knaus, said it's "hard to say how it's going to affect us."

He also said change is good and he's "definitely looking forward to having Dale as a part of the 48-88 shop."

"It's definitely got some potential," Knaus said.

Earnhardt hopes so.

"We needed this to happen," he said of the change. "I needed this to happen. Hopefully, this will get me back to winning races, running in the top five and running in the top 10."

David Newton covers NASCAR for ESPN.com. He can be reached at dnewtonespn@aol.com.