Honda withdraws from F1

[mlittle]

According to several different sources, one of the current manufacturers in Formula 1 is set to withdraw from the sport, beginning with an announcement on Friday(by all accounts, the manufacturer in question is Honda)..........


Here are several links to the above information...........
--F1: Honda Tipped for Withdrawal
--Honda Looking for F1 Team Buyer
--Something is going on at Honda......

In addition to the two above articles, autoracing1.com is currently reporting the following on their website..........

AutoRacing1.com has learned that Honda will officially announce their withdrawal from F1 at midnight and they will not be selling the team. It will just be wound down. This causes a big problem for Bernie because some of his contracts require a 20 car grid. We also hear other manufacturers may pull the plug on their F1 program. The big budgets in F1 are now coming out to haunt them. Max Mosley was right all along.

In addition, the blogosphere is weighing in on this as well.................
--Honda Out of F1 With Immediate Effect?
--Honda Withdrawing from F1?

Why do I get the feeling that there are whitewater rapids in the path of the grand prix circuit? Could it be that the huge budgets common to F1 are now, with the economic uncertainty in the air, coming to haunt the big manufacturers?

[mlittle]

Updating the above(quoting from autoracing1.com)................
(GMM) Honda is expected to announce on Friday morning its shock withdrawal from formula one.

The more than 700 staff at the Japanese team's Brackley (UK) headquarters were informed by bosses Ross Brawn and Nick Fry on Thursday, and fellow teams learned of the decision at the FOTA meeting in Geneva.

A public statement from Tokyo, grappling with news of plummeting sales of road cars, is expected early on Friday, amid rumours the outfit is up for sale and faces complete closure should a buyer not be found by January.

It is understood Honda will take responsibility for any debts, and would hand over the team to a buyer for a nominal price.

The news, amid the global financial crisis, comes after Honda's notable underachievement in the past two years despite one of the biggest budgets in the sport.

It would leave British driver Jenson Button, and his 2008 teammate Rubens Barrichello, without seats for the 2009 season, and scuppers the plans of young hopefuls Bruno Senna and Lucas di Grassi.

The 2009 grid would be reduced to just 18 cars, and spark fears that other manufacturers, whose commitment to formula one was considered perhaps less steadfast than Honda's, could follow suit.

Following the meeting of team bosses in Switzerland, FOTA confirmed in a statement that they "unanimously agreed" to more cost-cutting measures, including a "new low-cost engine" for 2011.

Spokespeople for Honda, and F1's governing body the FIA, declined to comment.

[Ed]

Thanks mlittle for the update,

Indeed it appears that Honda are set to announce thier withdrawl from the sport. It is reported that they have a month or so to find a buyer otherwise the operation will wind down. Honda doesn't appear to be interested in supplying engines either.

One of the stories being reported is that Ross Brawn is trying to find a buyer for the team and get Ferrari customer engines.

Related:
Honda to announce shock F1 withdrawal

[mlittle]

Continuing with the updates......

Honda Motor Company has confirmed that chief executive and president Takeo Fukui will front a media briefing on the topic of formula one in Tokyo on Friday afternoon (1.30pm Japanese time). It is widely expected that the Japanese manufacturer will announce its withdrawal from the sport, and the closure of the Brackley (UK) based racing outfit should a buyer not be found in the coming weeks. Spokespeople for the F1 team and the manufacturer would not confirm the speculation, both instead insisting more information will not be available until Fukui's briefing. The unofficial news, however, led to shares in Honda Motor Company rising 0.2 per cent. A financial analyst in Tokyo told the Bloomberg news agency: "A withdrawal by Honda would highlight just how awful the situation surrounding the auto industry is." Staff of Honda's Brackley factory anonymously said their pay will be guaranteed only to the end of March, and sources at other formula one teams report they were flooded with enquiries about jobs as the news broke. Sources close to Toyota, meanwhile, flatly denied suggestions it might follow Honda out of formula one, amid similar troubles for the Japanese manufacturer due to the economic downturn.

Couple more story links.................
---Honda set to pull out of F1
---Honda on the brink of folding

[Ed]

Honda Motor Company chief Takeo Fukui confirmed that the Japanese manufacturer is withdrawing from Formula One ahead of the 2009 season.

Honda is hoping to find a buyer for the team in the coming weeks, otherwise the operations of the team would be wound down and closed. Honda will not remain in the F1 engine manufactring either and the buyer would have sort that issue out as well.

The statement from Honda read:

December 5, 2008 – We, Honda Motor Co., Ltd., have come to the conclusion that we will withdraw from all Formula One activities, making 2008 the last season of participation.

This difficult decision has been made in light of the quickly deteriorating operating environment facing the global auto industry, brought on by the sub-prime problem in the United States, the deepening credit crisis and the sudden contraction of the world economies.

Honda must protect its core business activities and secure the long term as widespread uncertainties in the economies around the globe continue to mount. A recovery is expected to take some time.

Under these circumstances, Honda has taken swift and flexible measures to counter this sudden and expansive weakening of the marketplace in all business areas. However, in recognition of the need to optimize the allocation of management resources, including investment regarding the future, we have decided to withdraw from Formula One participation. We will enter into consultation with the associates of Honda Racing F1 Team and its engine supplier Honda Racing Development regarding the future of the two companies. This will include offering the team for sale.

In its third era of Formula One activities, Honda has been participating in Formula One races from the 2000 season, initially with BAR, by adopting a new format of jointly developing racing machines. Subsequently, in a move to meet the changing environment surrounding Formula One, we switched to running a 100% Honda-owned team commencing with the 2006 season.

Surmounting many challenges, the Honda Team achieved a Grand Prix victory in 2006, enabling Honda to receive overwhelming support from Honda fans around the world that were looking forward to greater success. It, therefore, has been an extremely difficult decision for us to come to this conclusion without having been able to fully meet the expectations of our fans.

By making the best of what we have learned during these times of economic turmoil, coupled with the spirit of challenge gained through active participation in racing, we intend to continue with our commitment in meeting new challenges.

Finally, we would like to take this opportunity to sincerely thank our fans and all those who have supported Honda’s Formula One efforts, including everyone in the world of Formula One.

Thank you very much.

Takeo Fukui
President and CEO
Honda Motor Co., Ltd

Related:

Honda will not offer engines to team buyer
Fukui to confirm Honda exit in Tokyo

[Ed]

The FIA issued this statement following Honda's announcement to withdrawl from Formula 1:

The announcement of Honda’s intended withdrawal from Formula One has confirmed the FIA’s longstanding concern that the cost of competing in the World Championship is unsustainable. In the FIA’s view, the global economic downturn has only exacerbated an already critical situation.

As the guardians of the sport, the FIA is committed to working with the commercial rights holder and the remaining members of FOTA to ensure that Formula One becomes financially sustainable.

The FIA also used the opportunity to announce that they were in exclusive negotiatons with Cosworth for the supply of standard engines from 2010 and Xtrac and Ricardo Transmissions to supply the complete Formula 1 power train.

[Ed]

The other manufacturers in Formula 1 have all committed to remain in the sport. Mercedes, BMW, Renault, Ferrari and Toyota have all announced that they are committed to the sport, they also committed to cutting costs in Formula 1.

Related: Other carmakers committed to F1

Meanwhile it appears that David Richards is the front runner in the race to buy the Honda team. David Richards was the successful bidder for the 12th team for the 2008 season but pulled out due to concerns regarding the customer car concept. With the Honda F1 team being offered at a bargain price along with the new engine regulations for 2010, this could be a very attractive deal for David Richards.

Related: David Richards eyes axed Honda F1 team

And Jenson Button could be jumping ship regardless whether a buyer is found or not. Button who has recently renewed his contract with Honda may be released by the team.

Related: Button could test Toro Rosso next week

[Jim Watt]

Ed and M. Little:

I came here directly from what is laughingly called "The Official F1 Website", you know, the one where Bernie is the God of all motor racing and Max is his [only] profit (oops, a Marxian slip) I meant, of course, prophet.

Maybe the only consolation to be had from the collapse of the world economy lies in the fact that Bernie and Max will have to sell some of their yachts, etc. (and cut back on the visits to lady professionals). But seriously, when I read in his letter that he, Max, is operating in his capacity as "guardian of F1" I have to fight back the gag response.

I love Cosworth, but I have to believe that Max and Bernie have purchased it given that malarky about the standard engine for the teams as a "money saving" step.

I am actually old enough to remember F1 before F1 Management. And I believe we could step back to the days of Mike Hawthorne and Jimmy Clark and J.M. Fangio without any loss in the excitement and the beauty of the racing.

What we need, it is becoming increasingly clear, is to wave good bye to Formula One. And let its many fans in the desert and the sub continent happily contend for the 'World Driving Championship" and "Manufacturer's Trophy and their little olympic style medals.

Meanwhile, we could start up an open-wheel competition, open to any and all teams who can meet the published specs AND qualify for one of the twenty or twenty four slots on the grid.

What a concept: qualifying that would actually BE qualifying; cars that would actually BE machines built by people who love racing and, most importantly of all, drivers who would actually race for the pleasure of racing and winning. Of course there could also be room on the cars for some sponsor's names and, probably, the new organization could negotiate with the owners of Silverstone and Hockenheim and Spa and Magny Cours and Monza and Montreal and indianapolis and a couple of venues in Spain and maybe even down under with a stop over in Cape Town on the way back. These venues are still in pretty good shape and even to the extent that they AREN'T, the drivers would all either cope or turn over their seats to someone who would.

Am I completely wrong? Are we actually NOT witnessing the collapse of the F1 establishment in a fog of greed and fear?

Will there BE any F1 after 2009?

Jim Watt

[Ed]

Good post Jim,

I think as a worse case scenario, F1 could indeed collapse however that is unlikely as there is too much at stake for too many people. The most likely outcome is a significantly reduced field with a significantly reduced budget. There is already talk about Red Bull considering a similar move to Honda and Toyota could be pulling out as well. That would leave just 6 teams plus probably one or two new teams buying those outgoing teams at a bargain price.

Now, what about the circuits ? That is an interesting one. 2 circuits have already dropped out with a number of other circuits raising concerns about their ability to host F1 races in the future. This is mainly due to the high price the organisers have to pay to be able to host an F1 event. That of course is reflected in the ticket price and with attendance figures almost certain to take a big hit in 2009, many of those circuits won't be able to afford hosting F1 races for much longer.
Even the rich countries of the Gulf aren't immune. Now that the oil prices are back to sensible prices, their governments cannot afford to continue funding these races. Besides, Bernie cannot have more than 2 or at most 3 F1 races in the Middle East and not have any races in North America!!

This is the area that Bernie needs to consider carefully and perhaps renegotiate with the circuits so they can drop their prices to make their events affordable. Afterall, it is the paying fan who keeps the sport alive.

[mlittle]

As I keep pondering the ramifications of Honda's withdrawal from the sport, I can't help but wonder a few things..............
----(1)will more follow Honda's lead and depart the sport?
----(2)with the tender to Cosworth of a standard engine package, does this help reduce the costs of the sport?
----(3)will any more current F1 venues depart the sport?
----(4)finally, after everything shakes out, what will the sport look like?

The one thing that is shocking about Honda's departure is that it was Honda and not Toyota; someone over on my blog asked that and I told them that while I wouldn't be surprised if Toyota followed suit, I was surprised that it wasn't Toyota that left first.


Jim's right.........are we witnessing the first stages in the collapse of Formula 1?

[JRico]

Do I Smell A Rat???????

Dec.20 (GMM) Bernie Ecclestone has struck back with a vengeance against Luca di Montezemolo, after the Ferrari president hinted heavily that he should quit.

Montezemolo, also chairman of the F1 teams' alliance FOTA, is sided strongly with Max Mosley and the teams in pushing for more than 50 per cent of the sport's revenue pie.


He was also heavily critical of F1 chief executive Ecclestone's governance, accusing the 78-year-old of not running the sport like a "normal" business.


In The Times newspaper, Ecclestone angrily fired back that di Montezemolo should keep quiet about commercial income.


"The only thing he has not mentioned is the extra money Ferrari get above all the other teams and all the extra things Ferrari have had for years -- the 'general help' they are considered to have had in formula one," he blasted.


"Ferrari get so much more money than everyone else," Ecclestone continued. "They know exactly what they get, they are not that stupid, although they are not that bright, either.


"They get about $80 million more. When they win the constructors' championship, which they did this year, they got $80 million more than if McLaren had won it."


Ecclestone said the special deal with Ferrari was agreed amid the 'breakaway' threat of a few years ago.


"That's where the $80 million comes in. We 'bought' Ferrari," he explained. "We 'bought' Ferrari's loyalty. Our deal with Ferrari was that we 'bought' them so they would not go to the others."


Ecclestone was also enraged at the thinly-veiled attack by Montezemolo about his business ethics, particularly the suggestion that he is not financially transparent.


"They have the right to send people into the company and search for everything," he countered. "Ferrari in particular, more than anybody, from day one, have had the right and they've never done it.


"We have bankers here and we've got (owners) CVC checking every single solitary thing. So anybody that starts saying that we've done anything wrong, I'll sue the a#%& off them," he fired.


Ecclestone suggested that Montezemolo might be unwise to push for a meeting to discuss the sport's distribution of revenue.


"What he should do, rather than asking for money, with all the extra money Ferrari gets, he should share all that amongst the teams," he said.


As a final scathing thought, Ecclestone attacked Montezemolo's complaint about Canada dropping off the 2009 calendar.


"The reason the Canadian grand prix is finished has been discussed with all the teams, including him, and it was agreed that what Canada was paying was nowhere near enough," Bernie said.


"It's a shame he's not in touch with people that seem to run the company as opposed to what he does -- work as a press officer," he concluded.