Like a hurricane on the tail of a breeze, the Japanese automobile giant Honda has baulked at the global financial situation and plunged the world of Formula 1 into its own crisis.
Compared with one year ago, the carmaker’s sales were down a near-unprecedented 32% in the key US market in November, moving chief executive Takeo Fukui to hastily conclude on December 4 that saving the half billion dollars that would otherwise have been burned in exhaust pipes during 2009 might be a good idea.
Tallied with the recently folded Honda-powered and financed satellite Super Aguri, Honda’s withdrawal reduces the 2009 grid to just 18 cars, not yet twelve months after last year’s entry list at one time bulged at a nearly fully subscribed 24.
Other car manufacturers involved in F1 are also in trouble — even BMW, who despite enjoying the business of both the “haves” and the “have mores” is busy calculating the devastating impact of sales 25% down. Toyota, the world’s biggest automaker, has suffered a loss of business greater even than its departing Japanese rival, and is now strongly tipped to depart, and Renault’s CEO Carlos Ghosn last week heaved a sigh of relief at the French government’s 26 billion euro pledge to save the limping auto industry. Mercedes-Benz, partner and co-owner of the drivers’ championship-winning McLaren team, is said to be in the midst of its lowest low since reunification, as fellow German marque Audi last week announced its withdrawal from the American Le Mans series and sponsorship of the America’s Cup.
Given the odd sight of hysterical joint team press releases vowing radical and unanimous cost cutting, it would not be a stretch to argue that the flight of Honda is just the first whack of the axe at the trunk of big-spending motor racing. If the other CEOs are as prudent as Fukui-san, and Red Bull does as expected and withdraws its second team Toro Rosso, the grid of 18 cars could easily become eight in a year or two.
But it might not be quite that bad. A less worrying theory is that Honda, while clearly not relieved at the crumbling world economy, saw it as a good reason to slip out the paddock while the going is bad. For car manufacturers, Formula 1 is solely a marketing exercise, but for the last few dozen races, the jingle — at a mind-blowing cost of probably a billion US dollars or more — has been something akin to an iffy “please buy a Honda, because our racing cars suck”. While negotiations for a new Concorde Agreement limp onwards, today’s contractual dead-zone in F1 means that withdrawal is possible without consequences.
Honda also made heavy weather of its last couple of campaigns. In 2007, while Renault took the stopwatch pain of slashing staff and the staunchly-Italian Ferrari sold off to cashed-up Arabs, Honda dispensed with four decades of tried-and-tested “money for logos” and joined the climate-change bandwagon by painting a horrific-looking giant satellite image of the earth on its F1 cars. Commendable as the save-the-world concept was — albeit liveried on a pollution-producing monster and resembling a revisiting of your dinner on a neon blue rug — it left the team without a single visible sponsor and Honda effectively propping up the entire project. Arch-rival Toyota is also blowing billions of euros on failing to win Grands Prix, but at least Panasonic pays handsomely to be a co-loser.
Botched Honda job or not, should the world’s financial system continue to collapse, one wonders for how long the extravagant world of Formula 1 can be sustained. Once the hobby playground of gentlemen racers or “purists” with weekends and pocket-money to burn, today the players are essentially multinationals whose decisions are made by board members accountable to shareholders who couldn’t care less about the sport. And if it’s ever an equation of sheer priority, F1 is a goner: with headlines of exhaust-fuelled global warming recently replaced only by the collapse of financial giants, it’s not difficult to predict which folly of champagne and petrol-soaked excess will be the first to be shown the chequered flag.
In the wake of the Honda exit, Max Mosley, the president of the sport’s governing FIA, urged teams to accept his proposal to use ultra-low-cost standard engines and gearboxes in 2010 and beyond. His mission is both to safeguard those left standing in pitlane, and also to fill the inevitable gaps left by automakers and billionaire individuals whose spending was only sustainable in good economic times, in victory, or when people were buying new cars.
In the end, the death of F1’s spendthrifts might not be bad for an industry that should always have been a sport first, and an advertising platform second.
Crikey is committed to hosting lively discussions. Help us keep the conversation useful, interesting and welcoming. We aim to publish comments quickly in the interest of promoting robust conversation, but we’re a small team and we deploy filters to protect against legal risk. Occasionally your comment may be held up while we review, but we’re working as fast as we can to keep the conversation rolling.
The Crikey comment section is members-only content. Please subscribe to leave a comment.
The Crikey comment section is members-only content. Please login to leave a comment.