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Honda exit sends F1 reeling

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Honda exit sends F1 reeling

Reaction in the sport to Honda's latest exit from Formula One, owing to the global financial and economic crisis has been swift and sure. Honda Racing F1 Team factory. Photo by xpb.cc. Discussion turned on whether the biggest loser...

Reaction in the sport to Honda's latest exit from Formula One, owing to the global financial and economic crisis has been swift and sure.

Honda Racing F1 Team factory.
Photo by xpb.cc.

Discussion turned on whether the biggest loser is driver Jenson Button or company chief executive Tadeo Fukui, who joined Honda because the company was involved in F1. Or perhaps the announcement was a pyrrhic victory for FIA president Max Mosley, who, after warning of spiraling costs, just managed to avoid saying, "I told you so." And, of course, everyone remotely attached to the sport claimed to have been harping about cost-cutting for donkey years. Most hopeful in F1's first brush with reality are reports that Honda, who won only one race in its latest F1 effort, as a constructor since 2005, has received calls from potential buyers.

"It's disappointing to me, personally, that we're pulling out in this fashion, having left no good results," Fukui told a news conference in Tokyo in announcing the decision. "But I want this to be viewed as a sign of just how difficult the business has become."

Fukui said Honda Motor Company would look to its core business, which means supplying the developed world that wants emissions reductions with alternative fuel vehicles and accommodating the developing world that wants small, low-cost cars. At the moment, that means doing so in the worst financial environment in about 80 years. His company will save upwards of $300 million by cutting the F1 team. That expenditure is reported to be in line with what other carmakers in the sport, BMW, Mercedes-Benz, FIAT (parent of Ferrari), Renault and Toyota, spend annually. Formula Money reported this fall that Honda, Japan's second-largest carmaker, had spent $1.5 billion in Formula One the past five years.

Although Honda F1 languished at the back of the grid through most of the 2008 season, it used the time to focus on developing a car to meet rules changes for '09 and on deploying added employees, most notable among them Ross Brawn, who helped guide Michael Schumacher to seven world driving titles at Benetton and Ferrari. Brawn had promised a competitive '09. The team is not expected to participate in testing this month in Spain.

Jenson Button, Honda Racing F1 Team.
Photo by xpb.cc.

Fukui, whose voice quavered during the announcement, was quoted by Reuters as saying he feels sorry for Button, who might be put out of a job for 2009 if the team is not purchased soon. "We need to stay positive ourselves and as one team because if we are not, no one will be interested in taking it over," Button, 28, was quoted by Associated Press.

Button's British compatriot Sir Jackie Stewart told BBC Radio 5 Live he thought prospects for purchase were poor in the current economic climate. A three-time world driving champion and former F1 team owner, Scotsman Stewart forged a decades long business relationship with Ford and later a relationship with Williams F1 sponsor Royal Bank of Scotland, which became the third-largest bank in the world before collapsing under debt and being nationalized in October by the British government.

Honda's expenses, including $30 million for Button's services, are in line with what other big spenders in the sport lay out to contest 18 or so races a year with two cars. Although among F1 builders Ferrari manufacture the smallest number of vehicles annually, its owner, FIAT, helps foot a yearly bill that in the past has been cited as nearly a half-billion dollars. Although Mercedes Motorsport head Norbert Haug on Friday called for F1 to halve costs in the next two years, he said the German carmaker was not considering quitting F1. The Mercedes partnership with McLaren delivered the 2008 world driving championship via Englishman Lewis Hamilton. Joining Haug in affirming their F1 commitments were BMW, Renault and Toyota, Japan's No. 1 car seller, which had already determined to scale back the lavish launch sequences seen for F1 annual models. Not quoted about commitment to the sport, double F1 team owner drinks maker Red Bull has introduced a cola product.

"This pullout is very sad," Haug told Reuters. "It only shows how important the cost-cutting measures are that we've been advocating for more than five years, and which have only been realized to a small degree. Mercedes-Benz's contribution is cost-efficient; the resonance in the media and in the public, which last season and Lewis Hamilton's win generated, was worth many times our financial investment."

Lewis Hamilton celebrates with McLaren employees.
Photo by McLaren.

BMW board member Klaus Draeger issued a statement that read in part, "Our F1 involvement is an integral part of the company strategy. There is no better platform than Formula One for demonstrating our brand values. BMW, moreover, makes targeted use of the Formula One project as a technology accelerator for series production."

BMW Sauber won a now-sidelined-by-money-woes race in Canada courtesy of driver Robert Kubica and finished third in the world constructors' championship on points from Kubica and teammate Nick Heidfeld. BMW sales were reported off 25 percent in November.

"I'm really sorry to hear this and I am close to the men of the team in this very difficult moment," Ferrari president Luca di Montezemelo told Ferrariworld.com. "Unfortunately, these things can happen in difficult times like these. Over the years we've seen coming and going several constructors in Formula One."

Mosley said he was not surprised. He predicted another team could go as well.

"I have to say it was not entirely unexpected," Mosley said of Honda's news in a conference call with reporters. "I've been expecting one of the major manufacturers to stop for some time because even before the current situation, the costs were completely out of control. And now I think it's difficult to imagine how any manufacturer could stay in unless we make really substantial reductions in cost."

Throughout his governance of the sport, Mosley has pushed for improved safety, increased energy efficiency, and now cost cutting. He proposed a single-engine formula earlier this year, a suggestion that prompted derisive reaction, especially from Ferrari and two-time world driving champion Fernando Alonso, currently with Renault. The FIA announced Friday it is in negotiations with Cosworth, Xtrac and Ricardo Transmissions for a low-cost engine and gearbox unit for use from 2010. An intended green initiative, kinetic energy recovery systems (KERS), will be optional in 2009. The large carmakers among team backers have expressed support for the system because they see its use in F1 as a proving ground for road-vehicle development.

Max Mosley, FIA President.
Photo by xpb.cc.

The sport's commercial rights holder, Bernie Ecclestone, told Sky Sports that he, too, had urged teams to cut costs.

"Both Max (Mosley) and myself have been campaigning now for quite a long time to try to reduce the necessity to spend vast amounts of money to be competitive. The trouble is that the teams are basically run by the technicians that really should be at home playing with their Playstations rather than spending fortunes to win races. What we are trying to say to the engineers is, 'Do all these things, come up with the ideas, but try to remember the cost.'"

Fukui's announcement came at the start of the business day in Tokyo, after Honda F1 team bosses Brawn and Nick Fry had attended a gathering Thursday of team principals Formula One Teams' Association meeting. After FOTA members in London heard Honda's news, Brawn gathered employees at the team's Brackley, England, headquarters to explain the decision.

By Friday morning in Brackley, Fry was telling BBC Sport that he had heard from entities interested in buying the team and that he felt upbeat about the future. Brawn told the BBC anyone buying the team will be in good position to challenge for top placings in 2009 because a buyer will receive a state-of-the-art facility -- meaning a new wind tunnel -- top-notch workers -- many of them recruited by Brawn -- and a favorable financial situation; the team carries no significant debt. Brawn also said finding engines will not be a problem. Ferrari engines are available after Force India ended a customer contract with the Maranello, Italy, team a year early.

"In the last 12 hours, we've had three serious people come and suggest they'd like to buy the team," Fry told the BBC. "We're one of the best-funded teams and have the best assets and resources in the pit lane. We'll be quite a desirable asset for somebody."

As dismal economic news that prompted Honda's decision continues to wash over the sport, stories refer to U.S. carmakers appealing to Congress for funds to stay in business. The United States is the ghost in the room of Formula One. No longer an F1 race host and no longer an F1 team nation -- Ford sold Jaguar Racing to Red Bull billionaire Dieter Mateschitz in 2004 -- Americans participate through selected sponsorship, such as Intel with BMW Sauber or AT&T with Williams or AMD with Ferrari or Hilton International with McLaren Mercedes, et al. But that doesn't mean Americans aren't thought of. A Honda F1 worker hired in June told BBC Sport on Friday, "We haven't had enough time to produce a decent car," he said. "This is what happens when people in America play with money; people with 30 years in the industry here lose their jobs."

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